Forgiving Student Loan Debt Would Stimulate Economy
February 8, 2009 12:15 PM Subscribe
Forgiving student loan debt to stimulate the economy is an idea that seems to be gaining some ground recently. There's a petition, at least two facebook groups, and call to contact your senators and representatives.
ohpleaseohpleaseohpleaseohpleaseohpleaseohpleaseohpleaseohplease
posted by felix betachat at 12:18 PM on February 8, 2009 [64 favorites]
posted by felix betachat at 12:18 PM on February 8, 2009 [64 favorites]
I guess this is a big deal for some people, but is student debt taking a huge chunk out of most people's income? Also, what about students trying to get loans now. If I were SallieMae and was told to just forgive student loan debt, make a guess how much money I would be willing to lend out next year.
A better idea would be to make it easier for students to refinance. Considering how low the current interest rates are, I imagine you could save hundreds of dollars over the lifetime of the loan by refinancing.
posted by Deathalicious at 12:18 PM on February 8, 2009 [6 favorites]
A better idea would be to make it easier for students to refinance. Considering how low the current interest rates are, I imagine you could save hundreds of dollars over the lifetime of the loan by refinancing.
posted by Deathalicious at 12:18 PM on February 8, 2009 [6 favorites]
ALL student debt? Or just the gov't-backed loans? The higher-interest, variable-rate debt from private loans is what's truly burying people.
posted by Thorzdad at 12:26 PM on February 8, 2009
posted by Thorzdad at 12:26 PM on February 8, 2009
Not exactly fair to the blue collar working classes mired in debt but not from their time at college.
posted by dash_slot- at 12:29 PM on February 8, 2009 [19 favorites]
posted by dash_slot- at 12:29 PM on February 8, 2009 [19 favorites]
If my loans were forgiven, the money would go straight into my savings account.
Just sayin'.
posted by mr_roboto at 12:30 PM on February 8, 2009 [5 favorites]
Just sayin'.
posted by mr_roboto at 12:30 PM on February 8, 2009 [5 favorites]
I've got a better idea. How about all debt should be forgiven? I mean, sure I've lived my life pretty responsibly so far, but I can see how that is not fair to others who have taken on more risky investments (well, formerly risky, at least!). What I'm saying: I can change my ways. Believe me. The only thing I ask, Congress, is that before you enact the "no need to pay for the thing you're obligated to pay for," can you please give me, like, two weeks to buy monster trucks and mansions and jet planes and stuff? Luvya, thanks.
posted by billysumday at 12:31 PM on February 8, 2009 [19 favorites]
posted by billysumday at 12:31 PM on February 8, 2009 [19 favorites]
To not repay them is an insult to every taxpayer in my country.
Please explain your curious statement. I probably pay more taxes than you; I have no student loans; I don't feel the slightest bit insulted.
How, exactly, is this not much much better than giving far, far more money to bankers who caused this issue in the first place?
Two different ways to put money into the economy.
1. give it to a very small number of rich people who have already taken us for trillions of dollars and who screwed up systematically over decades to get us to this point.
2. give it to a very large number of poor or middle-class people who worked hard to get an education and paid an astonishingly great cost for it that they wouldn't pay in any other Western state.
Yet, to you, case 2 is the "insult to the taxpayer". Please justify your statement!
(Are you a Republican, by chance? Republicans have a strange hatred for education and culture that seems to me to be a form of insanity... as I've often said, Americans would much rather kill other people's kids than educate their own.)
posted by lupus_yonderboy at 12:31 PM on February 8, 2009 [36 favorites]
Please explain your curious statement. I probably pay more taxes than you; I have no student loans; I don't feel the slightest bit insulted.
How, exactly, is this not much much better than giving far, far more money to bankers who caused this issue in the first place?
Two different ways to put money into the economy.
1. give it to a very small number of rich people who have already taken us for trillions of dollars and who screwed up systematically over decades to get us to this point.
2. give it to a very large number of poor or middle-class people who worked hard to get an education and paid an astonishingly great cost for it that they wouldn't pay in any other Western state.
Yet, to you, case 2 is the "insult to the taxpayer". Please justify your statement!
(Are you a Republican, by chance? Republicans have a strange hatred for education and culture that seems to me to be a form of insanity... as I've often said, Americans would much rather kill other people's kids than educate their own.)
posted by lupus_yonderboy at 12:31 PM on February 8, 2009 [36 favorites]
I FOR ONE AM IN OVERWHELMING FAVOR OF THIS
(And it's not that much of my monthly income, but on a long enough timeline, yes. It is.)
posted by kittens for breakfast at 12:31 PM on February 8, 2009 [3 favorites]
(And it's not that much of my monthly income, but on a long enough timeline, yes. It is.)
posted by kittens for breakfast at 12:31 PM on February 8, 2009 [3 favorites]
At least two Facebook groups, you say? This is turning into a real movement.
posted by KokuRyu at 12:33 PM on February 8, 2009 [20 favorites]
posted by KokuRyu at 12:33 PM on February 8, 2009 [20 favorites]
A Facebook group!? Wow, that's sure to have some impact!
posted by You Should See the Other Guy at 12:33 PM on February 8, 2009 [1 favorite]
posted by You Should See the Other Guy at 12:33 PM on February 8, 2009 [1 favorite]
We should read the fine print on this one. I mean, what if they just say 'I forgive you, you student loans you" but then you still have to pay?
posted by ORthey at 12:33 PM on February 8, 2009 [4 favorites]
posted by ORthey at 12:33 PM on February 8, 2009 [4 favorites]
From the article: The creation of this petition will surely help.
Yes, the creation of an online petition will surely help.
I'm with Science! on this one. It's about personal responsibility. I took on additional debt under the assumption I would earn more money in the future. Others may have been reluctant to make the same decision. This is unfair to them. The money I'm going to be repaying on my debt will go back into the economy. Debt repayment encourages lenders to make more loans. That sounds like economic stimulation to me.
I support public service loan forgiveness programs, but that's different.
posted by formless at 12:33 PM on February 8, 2009 [4 favorites]
Yes, the creation of an online petition will surely help.
I'm with Science! on this one. It's about personal responsibility. I took on additional debt under the assumption I would earn more money in the future. Others may have been reluctant to make the same decision. This is unfair to them. The money I'm going to be repaying on my debt will go back into the economy. Debt repayment encourages lenders to make more loans. That sounds like economic stimulation to me.
I support public service loan forgiveness programs, but that's different.
posted by formless at 12:33 PM on February 8, 2009 [4 favorites]
Considering how low the current interest rates are, I imagine you could save hundreds of dollars over the lifetime of the loan by refinancing.
More like thousands for the average student or tens of thousands for the average graduate student.
However, federal student loans have a semi-decent economic hardship forbearance program already, and they also have a new minimum payment program. I'm not against student loan forgiveness or refinancing (and lord knows I'd take advantage of such a program), but I'm not sure it will fly.
posted by jedicus at 12:33 PM on February 8, 2009
More like thousands for the average student or tens of thousands for the average graduate student.
However, federal student loans have a semi-decent economic hardship forbearance program already, and they also have a new minimum payment program. I'm not against student loan forgiveness or refinancing (and lord knows I'd take advantage of such a program), but I'm not sure it will fly.
posted by jedicus at 12:33 PM on February 8, 2009
billysumday: the difference between monster trucks and an education is that an education is the only product you pay for where you do more work than anyone else involved; it's also an investment that pays of for society in a multiplicity of ways, increasing earnings, reducing crime, and also making for better decision making overall.
posted by lupus_yonderboy at 12:34 PM on February 8, 2009
posted by lupus_yonderboy at 12:34 PM on February 8, 2009
How about a program instead to give the poor and working class in this country the chances of receiving quality education?
posted by tiger yang at 12:34 PM on February 8, 2009 [25 favorites]
posted by tiger yang at 12:34 PM on February 8, 2009 [25 favorites]
To not repay them is an insult to every taxpayer in my country.
Man, fuck that shit. Making education prohibitively expensive is the insult.
posted by kittens for breakfast at 12:34 PM on February 8, 2009 [100 favorites]
Man, fuck that shit. Making education prohibitively expensive is the insult.
posted by kittens for breakfast at 12:34 PM on February 8, 2009 [100 favorites]
If the aim is to get people out spending money to jump-start the economy, there's one easy way to do it: Roll back the section of the Reagan Tax Reform Act that took away the deduction for interest paid on personal debt.
posted by mr_crash_davis mark II: Jazz Odyssey at 12:34 PM on February 8, 2009 [4 favorites]
posted by mr_crash_davis mark II: Jazz Odyssey at 12:34 PM on February 8, 2009 [4 favorites]
If I were SallieMae and was told to just forgive student loan debt, make a guess how much money I would be willing to lend out next year.
My impressions is that the loan forgiveness here comes in the form of the government paying off the outstanding loans and making the lenders whole. So SallieMae would seem to gain somewhat (no losses on defaults/collections/the like).
I'd certainly prefer this approach to giving SallieMae money directly, all things being equal (not sure if they are or not...).
posted by Bort at 12:36 PM on February 8, 2009 [2 favorites]
My impressions is that the loan forgiveness here comes in the form of the government paying off the outstanding loans and making the lenders whole. So SallieMae would seem to gain somewhat (no losses on defaults/collections/the like).
I'd certainly prefer this approach to giving SallieMae money directly, all things being equal (not sure if they are or not...).
posted by Bort at 12:36 PM on February 8, 2009 [2 favorites]
Assuming debt forgiveness is a good idea...
Wouldn't you want to forgive the debts of the people more likely to turn their extra income into spending, rather than those of relatively young ex-students? Seems to me that a twenty- or thirty-something higher-educated graduate paying back their loan would be much more likely just to chuck the income into savings, or repaying other debt. That's not stimulating.
It'd make more sense to forgive the debt of the elderly, who're more likely to turn around and spend the extra income.
Or, perhaps, since it's a world recession, forgive the national debt of any number of developing countries.
posted by Fiasco da Gama at 12:36 PM on February 8, 2009 [1 favorite]
Wouldn't you want to forgive the debts of the people more likely to turn their extra income into spending, rather than those of relatively young ex-students? Seems to me that a twenty- or thirty-something higher-educated graduate paying back their loan would be much more likely just to chuck the income into savings, or repaying other debt. That's not stimulating.
It'd make more sense to forgive the debt of the elderly, who're more likely to turn around and spend the extra income.
Or, perhaps, since it's a world recession, forgive the national debt of any number of developing countries.
posted by Fiasco da Gama at 12:36 PM on February 8, 2009 [1 favorite]
I'm paying my own student loans (and have been for years now). I have zero interest in paying everybody else's, as well. (I also don't want to be paying for people to get lower mortgages after buying houses they couldn't afford in the first place, but I guess that's a separate metafilter post.)
posted by inigo2 at 12:36 PM on February 8, 2009 [2 favorites]
posted by inigo2 at 12:36 PM on February 8, 2009 [2 favorites]
Roll back the section of the Reagan Tax Reform Act that took away the deduction for interest paid on personal debt.
Student loan interest is already deductible, FWIW.
posted by mr_roboto at 12:37 PM on February 8, 2009
Student loan interest is already deductible, FWIW.
posted by mr_roboto at 12:37 PM on February 8, 2009
Two different ways to put money into the economy.
1. give it to a very small number of rich people who have already taken us for trillions of dollars and who screwed up systematically over decades to get us to this point.
2. give it to a very large number of poor or middle-class people who worked hard to get an education and paid an astonishingly great cost for it that they wouldn't pay in any other Western state.
False dilemma, LOL, amirite?
posted by mr_roboto at 12:38 PM on February 8, 2009 [1 favorite]
1. give it to a very small number of rich people who have already taken us for trillions of dollars and who screwed up systematically over decades to get us to this point.
2. give it to a very large number of poor or middle-class people who worked hard to get an education and paid an astonishingly great cost for it that they wouldn't pay in any other Western state.
False dilemma, LOL, amirite?
posted by mr_roboto at 12:38 PM on February 8, 2009 [1 favorite]
You borrow money, you pay it back. Period.
Enough of reinforcing bad habits.
posted by Pastabagel at 12:38 PM on February 8, 2009 [23 favorites]
Enough of reinforcing bad habits.
posted by Pastabagel at 12:38 PM on February 8, 2009 [23 favorites]
Nothing more than a hunch to back this up, but it seems unlikely that recent college grads (with debt) are the ones suffering the most from the down economy. They're probably spending about as much as they would with or without their education loan debt. Seems like we should really just ensure that enough debt is available for people who want to get an education now (while they're out of work).
As Science! said, forgiving loans to students who knew full well what they were getting into is absolutely the wrong message to send.
posted by pkingdesign at 12:39 PM on February 8, 2009
As Science! said, forgiving loans to students who knew full well what they were getting into is absolutely the wrong message to send.
posted by pkingdesign at 12:39 PM on February 8, 2009
Why student loan debt as opposed to any other kind of debt? And why for people making under $150,000 in particular? $50,000 I could see, but most people making six figures in a year are quite comfortable, and should be in a position to honor their commitments. I don't understand this. It seems like a transparent "Please, don't make everyone's debt go away...just mine and my peers' debt, natch" ploy, and I don't get why anyone would dignify such a thing with coverage or a response.
I guess I'm glad the leader of this "movement" seems to think starting a really big Facebook group will get him the attention of the right people.
posted by crinklebat at 12:41 PM on February 8, 2009 [1 favorite]
I guess I'm glad the leader of this "movement" seems to think starting a really big Facebook group will get him the attention of the right people.
posted by crinklebat at 12:41 PM on February 8, 2009 [1 favorite]
is student debt taking a huge chunk out of most people's income?
Given what I've seen? Yes. Not everybody gets the $50k-a-year professional job after college- hell, most people I know can't even afford to own a reliable car, much less make mortgage payments. What used to be middle-class is starting to look pretty affluent, especially in downeast Maine.
Lots of industrialized countries offer university educations, paid for by taxpayers. It's an insult to American students that one of the richest countries in the world isn't willing to pull that off.
posted by dunkadunc at 12:41 PM on February 8, 2009 [5 favorites]
Given what I've seen? Yes. Not everybody gets the $50k-a-year professional job after college- hell, most people I know can't even afford to own a reliable car, much less make mortgage payments. What used to be middle-class is starting to look pretty affluent, especially in downeast Maine.
Lots of industrialized countries offer university educations, paid for by taxpayers. It's an insult to American students that one of the richest countries in the world isn't willing to pull that off.
posted by dunkadunc at 12:41 PM on February 8, 2009 [5 favorites]
Student loan interest is already deductible, FWIW.
I thought he meant that credit card interest should be deductible as well, to encourage extra spending.
posted by jacalata at 12:43 PM on February 8, 2009
I thought he meant that credit card interest should be deductible as well, to encourage extra spending.
posted by jacalata at 12:43 PM on February 8, 2009
Wouldn't it be better to have a stimulus package that just gives everyone with a metafilter account a million dollars? I promise I'd spend it.
To pay for it, we could just follow in Huey Long's footsteps and share our wealth- tax 100% of income over 5 million bucks. That's the best thing about a democracy, you can just vote yourself rich.
posted by jenkinsEar at 12:44 PM on February 8, 2009
To pay for it, we could just follow in Huey Long's footsteps and share our wealth- tax 100% of income over 5 million bucks. That's the best thing about a democracy, you can just vote yourself rich.
posted by jenkinsEar at 12:44 PM on February 8, 2009
And yes, I would have no qualms about having my student loans forgiven.
These days, a college education seems to be a requirement for employment above working at Hannaford's, unless you go into construction and wear your body out by the time you're fifty.
posted by dunkadunc at 12:45 PM on February 8, 2009 [1 favorite]
These days, a college education seems to be a requirement for employment above working at Hannaford's, unless you go into construction and wear your body out by the time you're fifty.
posted by dunkadunc at 12:45 PM on February 8, 2009 [1 favorite]
As Science! said, forgiving loans to students who knew full well what they were getting into is absolutely the wrong message to send.
That's cool, but we've been sending out a lot of wrong messages lately, and feel at least as entitled to my terrible, terrible mistake that will keep me from building character as is, I dunno, any one of these douchebags to whom we've handed over metric fucktons of cash in the last couple of months. My mistake I made finishing my education, as opposed to running a goddamn business into the ground.
posted by kittens for breakfast at 12:47 PM on February 8, 2009 [12 favorites]
That's cool, but we've been sending out a lot of wrong messages lately, and feel at least as entitled to my terrible, terrible mistake that will keep me from building character as is, I dunno, any one of these douchebags to whom we've handed over metric fucktons of cash in the last couple of months. My mistake I made finishing my education, as opposed to running a goddamn business into the ground.
posted by kittens for breakfast at 12:47 PM on February 8, 2009 [12 favorites]
For me, debt forgiveness would allow me to pursue other expenditures that I'm just not afforded due to the massive chunk of income that debt repayment takes from my budget. In particular, I could actually consider buying a house. There are a lot of people like me where student loans get in the way of doing more than just getting by.
Actually, I'd like some sort of "Honesty in Education" act that would, if not possible to go back in time and affect me, then at least set aside promising young students and explain to them that vocational school paths aren't just for those who wouldn't cut it in college. Tens of thousands of dollars in debt, and an additional 4 years behind on the career path, and I'd probably be making more money as an electrician or automotive technician than the office job I work now. I'd probably also enjoy the job more.
It's not that I didn't enjoy college, and I really appreciate my education, but from a financial standpoint, going to the regular high school for college prep followed by a 4-year liberal arts degree may never pay as much as being one of the smartest kids at the tech school, and then working my way up to being a well-paid electrician or plumber with a job that is mostly recession-proof. That, and just because you never went to college doesn't mean you can't take a few courses or just be well-read.
posted by explosion at 12:48 PM on February 8, 2009 [13 favorites]
Actually, I'd like some sort of "Honesty in Education" act that would, if not possible to go back in time and affect me, then at least set aside promising young students and explain to them that vocational school paths aren't just for those who wouldn't cut it in college. Tens of thousands of dollars in debt, and an additional 4 years behind on the career path, and I'd probably be making more money as an electrician or automotive technician than the office job I work now. I'd probably also enjoy the job more.
It's not that I didn't enjoy college, and I really appreciate my education, but from a financial standpoint, going to the regular high school for college prep followed by a 4-year liberal arts degree may never pay as much as being one of the smartest kids at the tech school, and then working my way up to being a well-paid electrician or plumber with a job that is mostly recession-proof. That, and just because you never went to college doesn't mean you can't take a few courses or just be well-read.
posted by explosion at 12:48 PM on February 8, 2009 [13 favorites]
You borrow money, you pay it back. Period. Enough of reinforcing bad habits.
And fuck that shit already, too. What kittens for breakfast said.
posted by dunkadunc at 12:49 PM on February 8, 2009 [5 favorites]
And fuck that shit already, too. What kittens for breakfast said.
posted by dunkadunc at 12:49 PM on February 8, 2009 [5 favorites]
There are some obvious moral hazard arguments, and a huge and understandable objection from the folks who say, "well, I would have gone to grad school if I had known that my loan would have been forgiven." But if we set those aside for a moment and just look at it from an economic stimulus standpoint, it might be work considering. It would sure stimulate my personal economy.
On a related note, I'd be super in favor of a federal law that capped credit card interest at 5% above the prime rate. That would help people pay some bills and get out of debt. These crippling 26% interest rates on up are crippling. Yes, those folks shouldn't have run up credit card debt, but a federal cap would help the economy and wouldn't cost the government anything.
posted by Pater Aletheias at 12:54 PM on February 8, 2009 [5 favorites]
On a related note, I'd be super in favor of a federal law that capped credit card interest at 5% above the prime rate. That would help people pay some bills and get out of debt. These crippling 26% interest rates on up are crippling. Yes, those folks shouldn't have run up credit card debt, but a federal cap would help the economy and wouldn't cost the government anything.
posted by Pater Aletheias at 12:54 PM on February 8, 2009 [5 favorites]
(Just mentally delete one of those "crippling"s.) I used to work for the department of redundancy department.
posted by Pater Aletheias at 12:56 PM on February 8, 2009 [2 favorites]
posted by Pater Aletheias at 12:56 PM on February 8, 2009 [2 favorites]
You borrow money, you pay it back. Period.
So how does this apply to the generations of post-war Americans who have been voting to up government debt for decades, none of which will be settled for generations? Are Baby Boomers going to enjoy a special tax to pay back the Reagan years, so their kids and grandkids and great grandkids don't have to?
posted by rodgerd at 12:58 PM on February 8, 2009 [14 favorites]
So how does this apply to the generations of post-war Americans who have been voting to up government debt for decades, none of which will be settled for generations? Are Baby Boomers going to enjoy a special tax to pay back the Reagan years, so their kids and grandkids and great grandkids don't have to?
posted by rodgerd at 12:58 PM on February 8, 2009 [14 favorites]
I have been saying this for years. I pay out almost $700/month in student loan payments. Imagine all the crap (or houses or cars) I would buy with that much change to spare.
posted by mds35 at 12:58 PM on February 8, 2009
posted by mds35 at 12:58 PM on February 8, 2009
Robert Applebaum, an attorney from New York, thinks so and has an idea on how to help many in his shoes -- and trust me, there are many -- while stimulating the economy at the same time.
Everybody wins! Especially Robert the lawyer in New York, but also everybody! The rising tide generated by Robert, and all those Roberts who will finally be able to buy all those "consumer goods" they have craved for so long floats all boats!
THIS. COULD. WORK.
I am so excited right now.
posted by longsleeves at 12:59 PM on February 8, 2009 [1 favorite]
Everybody wins! Especially Robert the lawyer in New York, but also everybody! The rising tide generated by Robert, and all those Roberts who will finally be able to buy all those "consumer goods" they have craved for so long floats all boats!
THIS. COULD. WORK.
I am so excited right now.
posted by longsleeves at 12:59 PM on February 8, 2009 [1 favorite]
I have been trying to work my student loans down for a decade...I now owe more than when I started due to the fact that I had to take two years of 'hardship' where interest accrued while I didn't have to pay. I now have $350 of my monthly income tied up in these freaking loans. I just started working again 12 weeks after losing my job and my wife is still laid off. $350 a month would really, really help.
posted by UseyurBrain at 1:00 PM on February 8, 2009 [3 favorites]
posted by UseyurBrain at 1:00 PM on February 8, 2009 [3 favorites]
Saying student loan interest payments are deductible is a bit misleading. For example, I paid $250 in interest last year on my loans, but my standard deductible was far, far greater, so it was useless to deduct.
What I'd like to see instead is regulation of credit card fees and interest rates. (And throw in bank overdraft fees while we're at it.) Right now these companies can and do jack up rates to close to 30% interest if you make a late payment/etc., and they'll do it even if it was with a different company (universal default). It's borderline criminal.
I don't mind paying my student loans, because A) they've helped me achieve a higher income, and B) I reconsolidated and locked in at a low interest rate. But whenever I pay my credit card bills, I feel dirty. I'm not saying forgive the credit card debt, just cap interest rates at a more reasonable level, and lower the late/overage fees.
But I'm sure the banks have powerful lobbying to prevent this.
posted by wastelands at 1:00 PM on February 8, 2009 [3 favorites]
What I'd like to see instead is regulation of credit card fees and interest rates. (And throw in bank overdraft fees while we're at it.) Right now these companies can and do jack up rates to close to 30% interest if you make a late payment/etc., and they'll do it even if it was with a different company (universal default). It's borderline criminal.
I don't mind paying my student loans, because A) they've helped me achieve a higher income, and B) I reconsolidated and locked in at a low interest rate. But whenever I pay my credit card bills, I feel dirty. I'm not saying forgive the credit card debt, just cap interest rates at a more reasonable level, and lower the late/overage fees.
But I'm sure the banks have powerful lobbying to prevent this.
posted by wastelands at 1:00 PM on February 8, 2009 [3 favorites]
Sweet. Glad I worked 50 hours a week and went to the crappy school I could afford instead of the better school I couldn't.
posted by OrangeDrink at 1:02 PM on February 8, 2009 [11 favorites]
posted by OrangeDrink at 1:02 PM on February 8, 2009 [11 favorites]
Seems to me that a twenty- or thirty-something higher-educated graduate paying back their loan would be much more likely just to chuck the income into savings, or repaying other debt. That's not stimulating.
Thanks to fractional reserve banking, banks can lend out ~90% of savings so it's almost the same thing. Debt repayments free up capital for lenders to lend out again.
posted by troy at 1:06 PM on February 8, 2009
Thanks to fractional reserve banking, banks can lend out ~90% of savings so it's almost the same thing. Debt repayments free up capital for lenders to lend out again.
posted by troy at 1:06 PM on February 8, 2009
For example, I paid $250 in interest last year on my loans, but my standard deductible was far, far greater, so it was useless to deduct.
You need to knuckle down & buy that expensive house, Mr Consumer-slash-Taxpayer!
posted by troy at 1:07 PM on February 8, 2009
You need to knuckle down & buy that expensive house, Mr Consumer-slash-Taxpayer!
posted by troy at 1:07 PM on February 8, 2009
I guess this is a big deal for some people, but is student debt taking a huge chunk out of most people's income?
500 a month.
Yes, when you make less than 45,000 a year...that's A LOT.
Did I know what I was getting into? Not really. I was 18. I hadn't a clue, really. Does that make it OK? No, it doesn't. But I sure would spend a hell of a lot more money if I had an extra 500 a month.
posted by Windigo at 1:08 PM on February 8, 2009 [4 favorites]
500 a month.
Yes, when you make less than 45,000 a year...that's A LOT.
Did I know what I was getting into? Not really. I was 18. I hadn't a clue, really. Does that make it OK? No, it doesn't. But I sure would spend a hell of a lot more money if I had an extra 500 a month.
posted by Windigo at 1:08 PM on February 8, 2009 [4 favorites]
I'd be happy if they'd just increase the income limit on the student loan interest deduction, and make private student loan interest qualify. But hell, I'd take the forgiveness too, and for the record that would free up a lot of money each month, some of which I would save, but a good chunk of which I would spend (at the moment, probably finishing the basement. Woot!)
posted by dpx.mfx at 1:09 PM on February 8, 2009 [1 favorite]
posted by dpx.mfx at 1:09 PM on February 8, 2009 [1 favorite]
But I'm sure the banks have powerful lobbying to prevent this.
They lobbied to delay the rule change to 2010, but some reforms are coming. . .
posted by troy at 1:09 PM on February 8, 2009
They lobbied to delay the rule change to 2010, but some reforms are coming. . .
posted by troy at 1:09 PM on February 8, 2009
1. There (obviously) is/was a massive credit bubble. This artificially and absurdly inflates the price of a degree.
2. There is a DRASTIC accreditation bubble. You can't get hired to file papers in a cabinet without a four year degree. This furthermore inflates the price of a degree.
3. Education is humorously inefficient. It consists of sitting in a room with 100 other people while a grad student from Foreignpeopleland walks through a list of concepts that are presumably related to the topic of the class. The problem with this mode of learning, however, is that humans can read about 6x times faster than they can talk. Therefore, what takes 6 weeks to cover in the classroom takes 1 week to cover out of a well-written textbook. Furthermore, inasmuch as we're not concerned with "liberal arts" education and actual "trade" education, the only way to learn a trade is to actually practice a trade under the tutelage of an experienced mentor. Linguistic concepts are useless.
4. Because education loans are publically sponsored, there is massive moral hazard on the part of the lenders.
American education is a massive clusterfuck. The system has been fucked with such that it is not remotely accurately priced, and its sole purpose is to "impress" or otherwise fool employer firms through resume-posturing, without remotely enhancing the productivity of the degree holder.
Human beings are not capable of mass society. Our collective ignorance directly causes human suffering, in this case by saddling naive young adults with decades of indentured servitude.
posted by norabarnacl3 at 1:10 PM on February 8, 2009 [21 favorites]
2. There is a DRASTIC accreditation bubble. You can't get hired to file papers in a cabinet without a four year degree. This furthermore inflates the price of a degree.
3. Education is humorously inefficient. It consists of sitting in a room with 100 other people while a grad student from Foreignpeopleland walks through a list of concepts that are presumably related to the topic of the class. The problem with this mode of learning, however, is that humans can read about 6x times faster than they can talk. Therefore, what takes 6 weeks to cover in the classroom takes 1 week to cover out of a well-written textbook. Furthermore, inasmuch as we're not concerned with "liberal arts" education and actual "trade" education, the only way to learn a trade is to actually practice a trade under the tutelage of an experienced mentor. Linguistic concepts are useless.
4. Because education loans are publically sponsored, there is massive moral hazard on the part of the lenders.
American education is a massive clusterfuck. The system has been fucked with such that it is not remotely accurately priced, and its sole purpose is to "impress" or otherwise fool employer firms through resume-posturing, without remotely enhancing the productivity of the degree holder.
Human beings are not capable of mass society. Our collective ignorance directly causes human suffering, in this case by saddling naive young adults with decades of indentured servitude.
posted by norabarnacl3 at 1:10 PM on February 8, 2009 [21 favorites]
To not repay them is an insult to every taxpayer in my country.
Please explain your curious statement. I probably pay more taxes than you; I have no student loans; I don't feel the slightest bit insulted.
The way I see it is that tax payers should expect their taxes to pay for good programs and they should get their money's worth, that's an ideal of course. I accepted government funds to pay for my education with the agreement that I would pay back what I owed to state and federal agencies. For me to walk away from the loans I knew full well would have to be paid back is a giant "screw you" to every person who put a penny or a fraction of a penny or whatever towards my education by funding the loan programs with taxpayer money (or corporate/business/sales tax revenues etc.), and expected responsible use of their money.
That's how I see it. I needed money I didn't have to pay for my education; the country stepped up and gave me the cash, and I owe it to the country to pay it back.
The financial crisis, other people making or accepting bad loans, theft of investments, waste of bailout money, and the astronomical price of higher education are all important issues and also insults to the citizen and taxpayer, but I didn't address them.
I took public money and I will pay it back.
posted by Science! at 1:15 PM on February 8, 2009 [8 favorites]
Please explain your curious statement. I probably pay more taxes than you; I have no student loans; I don't feel the slightest bit insulted.
The way I see it is that tax payers should expect their taxes to pay for good programs and they should get their money's worth, that's an ideal of course. I accepted government funds to pay for my education with the agreement that I would pay back what I owed to state and federal agencies. For me to walk away from the loans I knew full well would have to be paid back is a giant "screw you" to every person who put a penny or a fraction of a penny or whatever towards my education by funding the loan programs with taxpayer money (or corporate/business/sales tax revenues etc.), and expected responsible use of their money.
That's how I see it. I needed money I didn't have to pay for my education; the country stepped up and gave me the cash, and I owe it to the country to pay it back.
The financial crisis, other people making or accepting bad loans, theft of investments, waste of bailout money, and the astronomical price of higher education are all important issues and also insults to the citizen and taxpayer, but I didn't address them.
I took public money and I will pay it back.
posted by Science! at 1:15 PM on February 8, 2009 [8 favorites]
Yes, I would like fries with that, nonbarnacl3.
posted by jonmc at 1:16 PM on February 8, 2009 [2 favorites]
posted by jonmc at 1:16 PM on February 8, 2009 [2 favorites]
I think the problem with this is that it would punish people who A) worked hard to pay off their student loads, B) considered but chose to go to higher education because they didn't want to be saddled with student debt, and C) those who for whatever reason never had the opportunity for higher ed.
Maybe something better would be to forgive some amount (10K?) of any type of debt (credit card, mortgage, medical, etc). This assumes that the US nationalized the financial system. Also, if a person had no debt, they would get a credit for any one of the industries the government bails out - such as towards a car, mortgage, maybe soon airline tickets. Money gets spent, people have less debt, industries get customers.
posted by Staggering Jack at 1:18 PM on February 8, 2009 [1 favorite]
Maybe something better would be to forgive some amount (10K?) of any type of debt (credit card, mortgage, medical, etc). This assumes that the US nationalized the financial system. Also, if a person had no debt, they would get a credit for any one of the industries the government bails out - such as towards a car, mortgage, maybe soon airline tickets. Money gets spent, people have less debt, industries get customers.
posted by Staggering Jack at 1:18 PM on February 8, 2009 [1 favorite]
Saying student loan interest payments are deductible is a bit misleading. For example, I paid $250 in interest last year on my loans, but my standard deductible was far, far greater, so it was useless to deduct.
You made a mistake, wastelands. The student loan deduction is a separate line item, in addition to the standard deduction. It comes before itemization on the 1040 form. You should refile and get some extra money back.
posted by mr_roboto at 1:21 PM on February 8, 2009
You made a mistake, wastelands. The student loan deduction is a separate line item, in addition to the standard deduction. It comes before itemization on the 1040 form. You should refile and get some extra money back.
posted by mr_roboto at 1:21 PM on February 8, 2009
Did I know what I was getting into? Not really. I was 18.
This sums it up perfectly for me. We define 18 year olds as adults, but that's a polite legal fiction. Most 18 year olds simply do not have the financial experience and judgment to understand the ramifications of taking on tens of thousands of dollars in debt. How could they when most middle-class 18 year olds have never so much as signed a lease or been responsible for monthly utility payments?
posted by jason's_planet at 1:22 PM on February 8, 2009 [1 favorite]
This sums it up perfectly for me. We define 18 year olds as adults, but that's a polite legal fiction. Most 18 year olds simply do not have the financial experience and judgment to understand the ramifications of taking on tens of thousands of dollars in debt. How could they when most middle-class 18 year olds have never so much as signed a lease or been responsible for monthly utility payments?
posted by jason's_planet at 1:22 PM on February 8, 2009 [1 favorite]
Federal student loans have a lot of outs as it is for those who pay close attention. The private loans are where the nightmares begin. Rather than send out that social security statement, an annual pamphlet on how you can manage your student loans so they don't ruin your life might be way more useful.
posted by medea42 at 1:23 PM on February 8, 2009
posted by medea42 at 1:23 PM on February 8, 2009
I'd be happy if they'd just increase the income limit on the student loan interest deduction, and make private student loan interest qualify.
The limit now is, what, $145,000 married filing jointly? That's pretty high. What is it if you're filing single?
posted by mr_roboto at 1:23 PM on February 8, 2009
The limit now is, what, $145,000 married filing jointly? That's pretty high. What is it if you're filing single?
posted by mr_roboto at 1:23 PM on February 8, 2009
lupus_yonderboy is right, though I think even that's too simplistic a way of putting this. Every type of government action is going to benefit some people more than others, so those getting all resentful and whiny about how they managed to make it without incurring a lot of student loan debt is pretty damn silly. You're an inspiration to us all, and everything, but I don't feel like I'm being punished for paying taxes that support a fire department that I haven't made use of yet. Anyway, helping people who took on debt for education is probably more worthy than helping people who took on debt for home ownership or consumer goods, or chose to work in industries that were obviously dying.
At the same time, as much I could personally use the debt-forgiveness, we do have a lot of laws and regulations already making student loan debt the most bearable kind of debt to have. That's probably the one reasonable argument for not putting these people at the front of the government bailout queue.
It should also be pointed out that the deduction for student loan interest payment, as nice as it is (and again, far more noble than the tax code-jiggering in favor of home ownership) is capped at 2500/yr. And that's if you're making under 50k.
posted by aswego at 1:24 PM on February 8, 2009 [1 favorite]
At the same time, as much I could personally use the debt-forgiveness, we do have a lot of laws and regulations already making student loan debt the most bearable kind of debt to have. That's probably the one reasonable argument for not putting these people at the front of the government bailout queue.
It should also be pointed out that the deduction for student loan interest payment, as nice as it is (and again, far more noble than the tax code-jiggering in favor of home ownership) is capped at 2500/yr. And that's if you're making under 50k.
posted by aswego at 1:24 PM on February 8, 2009 [1 favorite]
I'm sure this would bolster the housing market mightily, so I'm opposed on the grounds that I'm not quite ready to buy a house, and I never needed any student loans. :P
But seriously I'm not sure how much good merely adjusting these debts will "stimulate" the economy, aside from merely making some people feel more more comfortable buying houses. I'd suggest more administrative solutions instead, such as postponing the school debt until after the recession.
A far better idea is paying more of the tuition for current students, especially those in technical & medical fields. More current students in scientists & engineers now helps enormously over the long run, while reducing unemployment pressure short term.
posted by jeffburdges at 1:26 PM on February 8, 2009 [1 favorite]
But seriously I'm not sure how much good merely adjusting these debts will "stimulate" the economy, aside from merely making some people feel more more comfortable buying houses. I'd suggest more administrative solutions instead, such as postponing the school debt until after the recession.
A far better idea is paying more of the tuition for current students, especially those in technical & medical fields. More current students in scientists & engineers now helps enormously over the long run, while reducing unemployment pressure short term.
posted by jeffburdges at 1:26 PM on February 8, 2009 [1 favorite]
American education is a massive clusterfuck. The system has been fucked with such that it is not remotely accurately priced, and its sole purpose is to "impress" or otherwise fool employer firms through resume-posturing, without remotely enhancing the productivity of the degree holder.
Just, wow. American higher education is rightly seen as the envy of the world. Seriously. There's a reason why so many Korean, Japanese, Chinese, European and wealthy African students come here to study. And it ain't our pretty girls. okay, maybe it's a little bit our pretty girls. The issue of exorbitant tuition rates is a secondary problem. Indeed, were American higher education not so fabulously effective, people would long since have rebelled. Fix the economic inefficiencies in the system without killing the goose. That's the task on the table for anyone who wants to increase access and decrease students' debt loads.
Look, I'm aware of and sensitive to the whole "personal responsibility" argument. But at the end of the day, we only apply it to college students (and the auto-infantilized graduate students in whose number I count myself) out of a paternalistic sense of bootstrappiness. If we looked at higher education as a small business expense and recognized that the economy was set up in such a fashion as to require a large majority of entrepreneurs to absorb a near-crippling load of debt simply to get into the marketplace, it would be a lot easier to conceptualize student loan relief as something other than a handout. The truly privileged kids don't have debt. The rest of us do.
I'm graduating this year with a humanities PhD for which I have worked mightily for a decade. I'll get a good job and make a contribution to my field and to the higher education system I've lauded above. But to get there, I've taken on debt that rivals that of a law student or medical student. Economically, this is idiotic. Professionally, it was the only way to realize my potential within my chosen field. Give me the same choice to make and I'd do it again in a heartbeat. I'll carry my debt long into tenure. But the availability of reasonable credit has permitted me to make a go of becoming an academic when my social background would not otherwise have suggested this as a viable career path. The academy is better for having me in it, and I'm happier for having received excellent training and for doing what I love.
So count me hopeful that the first president we've ever had who has known the reality of student loan debt (is that right? I think that's right) might look favorably on relieving the debt load for this generation of students. To do so would unleash incredible potentials, both in terms of graduates' abilities to take on more risk in pursuing their post-collegiate career paths, and in their ability to contribute directly to the American economy through spending what they would otherwise have been delivering to Sallie Mae in bucket loads.
And I'll tell you, sure as shit, what I would not do with that money. I wouldn't deliver a multimillion dollar bonus to a knuckleheaded corporate exec who drinks chilled vodka from a urinating ice sculpture. You know...since "personal responsibility" is the watchword of the day.
posted by felix betachat at 1:27 PM on February 8, 2009 [37 favorites]
Just, wow. American higher education is rightly seen as the envy of the world. Seriously. There's a reason why so many Korean, Japanese, Chinese, European and wealthy African students come here to study. And it ain't our pretty girls. okay, maybe it's a little bit our pretty girls. The issue of exorbitant tuition rates is a secondary problem. Indeed, were American higher education not so fabulously effective, people would long since have rebelled. Fix the economic inefficiencies in the system without killing the goose. That's the task on the table for anyone who wants to increase access and decrease students' debt loads.
Look, I'm aware of and sensitive to the whole "personal responsibility" argument. But at the end of the day, we only apply it to college students (and the auto-infantilized graduate students in whose number I count myself) out of a paternalistic sense of bootstrappiness. If we looked at higher education as a small business expense and recognized that the economy was set up in such a fashion as to require a large majority of entrepreneurs to absorb a near-crippling load of debt simply to get into the marketplace, it would be a lot easier to conceptualize student loan relief as something other than a handout. The truly privileged kids don't have debt. The rest of us do.
I'm graduating this year with a humanities PhD for which I have worked mightily for a decade. I'll get a good job and make a contribution to my field and to the higher education system I've lauded above. But to get there, I've taken on debt that rivals that of a law student or medical student. Economically, this is idiotic. Professionally, it was the only way to realize my potential within my chosen field. Give me the same choice to make and I'd do it again in a heartbeat. I'll carry my debt long into tenure. But the availability of reasonable credit has permitted me to make a go of becoming an academic when my social background would not otherwise have suggested this as a viable career path. The academy is better for having me in it, and I'm happier for having received excellent training and for doing what I love.
So count me hopeful that the first president we've ever had who has known the reality of student loan debt (is that right? I think that's right) might look favorably on relieving the debt load for this generation of students. To do so would unleash incredible potentials, both in terms of graduates' abilities to take on more risk in pursuing their post-collegiate career paths, and in their ability to contribute directly to the American economy through spending what they would otherwise have been delivering to Sallie Mae in bucket loads.
And I'll tell you, sure as shit, what I would not do with that money. I wouldn't deliver a multimillion dollar bonus to a knuckleheaded corporate exec who drinks chilled vodka from a urinating ice sculpture. You know...since "personal responsibility" is the watchword of the day.
posted by felix betachat at 1:27 PM on February 8, 2009 [37 favorites]
I hope the *real* poor of America rise up and slay you all in your sleep.
posted by PeterMcDermott at 1:32 PM on February 8, 2009 [15 favorites]
posted by PeterMcDermott at 1:32 PM on February 8, 2009 [15 favorites]
norabarnacl3: The problem with this mode of learning, however, is that humans can read about 6x times faster than they can talk.
For romance novels == true.
For academic textbooks == laughably false.
posted by Mitrovarr at 1:33 PM on February 8, 2009 [8 favorites]
For romance novels == true.
For academic textbooks == laughably false.
posted by Mitrovarr at 1:33 PM on February 8, 2009 [8 favorites]
The problem with this mode of learning, however, is that humans can read about 6x times faster than they can talk.
Christ. Yeah, forgot that one. Prepare a lecture some time, troglodyte. It's goddamn hard. Especially because you're trying to use a sieve of words to help students retain what they could not grasp by reading. Pedagogy is an art, inefficient by its very nature and demanding to master. Alas, to a thug, all art is wasted time and misspent lucre.
posted by felix betachat at 1:39 PM on February 8, 2009 [9 favorites]
Christ. Yeah, forgot that one. Prepare a lecture some time, troglodyte. It's goddamn hard. Especially because you're trying to use a sieve of words to help students retain what they could not grasp by reading. Pedagogy is an art, inefficient by its very nature and demanding to master. Alas, to a thug, all art is wasted time and misspent lucre.
posted by felix betachat at 1:39 PM on February 8, 2009 [9 favorites]
I have no consumer debt whatsoever. No car payment (I only buy used), no credit cards, no mortgage. My only debt is my student loan and that eats me up at 300 a month. I am so in favor of this.
posted by sourwookie at 1:43 PM on February 8, 2009
posted by sourwookie at 1:43 PM on February 8, 2009
Just, wow. American higher education is rightly seen as the envy of the world.
posted by felix betachat at 1:27 PM on February 8
What a degree purchases is prestige: the capacity to impress other people. American higher education is the envy of the world for the exact same reason Microsoft has the OS market cornered: simply a result of being first-to-market. From a pure productivity standpoint I highly doubt there is a significant difference in the Economics 101 class at Harvard than that at Bumfuckistan University. The Big Question is should prestige/accreditation actually cost this much, or are people irrationally pricing it due to a combination of cognitive irrationality and lender parasitism.
Especially because you're trying to use a sieve of words to help students retain what they could not grasp by reading.
posted by felix betachat at 1:39 PM on February 8
It is exactly this type of elitist thinking that is the problem. Yes I'm sure your brain is privy to such poetic concepts that are capturable only through spoken word and artful gesticulation, but the reality is you're only masturbating yourself and your students think you're an insufferable bore. Tissue?
posted by norabarnacl3 at 1:47 PM on February 8, 2009 [4 favorites]
posted by felix betachat at 1:27 PM on February 8
What a degree purchases is prestige: the capacity to impress other people. American higher education is the envy of the world for the exact same reason Microsoft has the OS market cornered: simply a result of being first-to-market. From a pure productivity standpoint I highly doubt there is a significant difference in the Economics 101 class at Harvard than that at Bumfuckistan University. The Big Question is should prestige/accreditation actually cost this much, or are people irrationally pricing it due to a combination of cognitive irrationality and lender parasitism.
Especially because you're trying to use a sieve of words to help students retain what they could not grasp by reading.
posted by felix betachat at 1:39 PM on February 8
It is exactly this type of elitist thinking that is the problem. Yes I'm sure your brain is privy to such poetic concepts that are capturable only through spoken word and artful gesticulation, but the reality is you're only masturbating yourself and your students think you're an insufferable bore. Tissue?
posted by norabarnacl3 at 1:47 PM on February 8, 2009 [4 favorites]
I am well beyond my own student days. But for those very very fine people commenting about moral obligations to repay loans etc I would suggest that you take a look at how many payouts will be given to those who should not have got into the position they did or who got others into bad positions because of less than responsible actions. If my money bails out a huge bank and gives the CEO millions in a bonus, then I would much prefer that a student get his loan taken care of and get him out there doing productive work and making a good life for himself.
posted by Postroad at 1:49 PM on February 8, 2009 [7 favorites]
posted by Postroad at 1:49 PM on February 8, 2009 [7 favorites]
Saying student loan interest payments are deductible is a bit misleading. For example, I paid $250 in interest last year on my loans, but my standard deductible was far, far greater, so it was useless to deduct.
Isn't student loan interest an adjustment, rather than a deduction? It's right there on Line 33 of my 1040, and gets subtracted from my total income to give me my adjusted gross income.
posted by Johnny Assay at 1:49 PM on February 8, 2009 [2 favorites]
Isn't student loan interest an adjustment, rather than a deduction? It's right there on Line 33 of my 1040, and gets subtracted from my total income to give me my adjusted gross income.
posted by Johnny Assay at 1:49 PM on February 8, 2009 [2 favorites]
felix: People have rebelled. We have humanities PhD students demanding a professorship for themselves, and companies who will hire a student with a Computer Science Bachelors but refuse to take a Computer Science PhD's resume. There's massive angst over Adjunct faculty being paid poorly.
That said my student debt isn't very hard to cope with, especially with the market crash dramatically lowering interest rates. People spend more on X-Box in a month than I do on student loans.
Does anyone else think it strange that the economic crisis appears to be primarily that real estate prices went down? Is that not allowed?
posted by pwnguin at 1:50 PM on February 8, 2009
That said my student debt isn't very hard to cope with, especially with the market crash dramatically lowering interest rates. People spend more on X-Box in a month than I do on student loans.
Does anyone else think it strange that the economic crisis appears to be primarily that real estate prices went down? Is that not allowed?
posted by pwnguin at 1:50 PM on February 8, 2009
I appreciate what this guys is trying to do, but this isn't any better than the pork ridden stimulus bill being debated right now.
posted by timburns15330 at 1:51 PM on February 8, 2009 [1 favorite]
posted by timburns15330 at 1:51 PM on February 8, 2009 [1 favorite]
Make education cheaper, stop spending so much fucking money on football, and put Bush in prison.
I'm a third year college student. All three of these things would help.
posted by kldickson at 1:52 PM on February 8, 2009 [3 favorites]
I'm a third year college student. All three of these things would help.
posted by kldickson at 1:52 PM on February 8, 2009 [3 favorites]
norabarnacl3: American higher education is the envy of the world for the exact same reason Microsoft has the OS market cornered: simply a result of being first-to-market.
*Facepalm*
The universities in Europe and England, let me introduce you to them.
On a side note, the success of non-western universities at teaching is a difficult, nuanced question. It varies by culture, country, and institution - rather as one would expect.
posted by Mitrovarr at 1:52 PM on February 8, 2009 [3 favorites]
*Facepalm*
The universities in Europe and England, let me introduce you to them.
On a side note, the success of non-western universities at teaching is a difficult, nuanced question. It varies by culture, country, and institution - rather as one would expect.
posted by Mitrovarr at 1:52 PM on February 8, 2009 [3 favorites]
How would people feel if the forgiveness was paid for by only taxes on the top 1% of the country? The reason I ask is because the rich, even with all the tax cuts and everything, already pay most taxes because they make so much money. When people talk about "the tax payer" they picture the average middle class family, but that's not where most tax revenue comes from.
Anyway, this would be a pretty big benefit for me personally, and there are a lot of people who have it harder and have trouble paying back student loans. Howard Dean had this idea back in 2004: Make student loan payment a part of the tax system, kind of like social security. You get withholding from your paycheck to pay for your education, and if you don't make enough money you wouldn't have to pay. It would reduce the risk for borrows and it would also reduce the risk for lenders, because they wouldn't have to worry about collection: Anyone who could pay would pay.
It would certainly suck for people who worked their way through college. A better solution might be something like a $30k post-education refundable tax credit paid over 10 years. So that people who worked their way through college would get the same benefit.
You borrow money, you pay it back. Period. Enough of reinforcing bad habits.
Pastabagel's predatory lender protection act. Why should we expect individuals to pay back their debts at the same time they pay taxes to bail out wallstreet? If we're going to have a jubilee, it can't just be for millionaire wall-street tycoons, financed (even if partially) by middle class taxes.
You need to knuckle down & buy that expensive house, Mr Consumer-slash-Taxpayer!
And just think the $15,000 tax credit for buying a house in the senate stimulus bill will definitely help people buy houses! And not help to keep house prices unrealistically high.
I guess the problem for me is that people go on and on about "personal responsibility" and "Shared sacrifice" but they mean personal responsibility to pay back corporations that screw them over, and shared sacrifice so that rich people can keep their tax cuts. It's kind of disgusting.
posted by delmoi at 1:58 PM on February 8, 2009 [8 favorites]
Anyway, this would be a pretty big benefit for me personally, and there are a lot of people who have it harder and have trouble paying back student loans. Howard Dean had this idea back in 2004: Make student loan payment a part of the tax system, kind of like social security. You get withholding from your paycheck to pay for your education, and if you don't make enough money you wouldn't have to pay. It would reduce the risk for borrows and it would also reduce the risk for lenders, because they wouldn't have to worry about collection: Anyone who could pay would pay.
It would certainly suck for people who worked their way through college. A better solution might be something like a $30k post-education refundable tax credit paid over 10 years. So that people who worked their way through college would get the same benefit.
You borrow money, you pay it back. Period. Enough of reinforcing bad habits.
Pastabagel's predatory lender protection act. Why should we expect individuals to pay back their debts at the same time they pay taxes to bail out wallstreet? If we're going to have a jubilee, it can't just be for millionaire wall-street tycoons, financed (even if partially) by middle class taxes.
You need to knuckle down & buy that expensive house, Mr Consumer-slash-Taxpayer!
And just think the $15,000 tax credit for buying a house in the senate stimulus bill will definitely help people buy houses! And not help to keep house prices unrealistically high.
I guess the problem for me is that people go on and on about "personal responsibility" and "Shared sacrifice" but they mean personal responsibility to pay back corporations that screw them over, and shared sacrifice so that rich people can keep their tax cuts. It's kind of disgusting.
posted by delmoi at 1:58 PM on February 8, 2009 [8 favorites]
I wouldn't complain due to my own massive student loans, but it seems unwise from a capitalist standpoint. Isn't this one of the main factors that motivates people to earn higher wages and strive in the marketplace? "I would've taken that personally fulfilling $25k job that lets me focus on my art, but it's just not going to cut it to pay back my loans and still live a minimally comfortable life. I better sell my soul and enter corporate America." I don't mean to place any value judgments on decisions like that, but surely it's one of the things holding together this twisted society of ours.
posted by naju at 1:59 PM on February 8, 2009
posted by naju at 1:59 PM on February 8, 2009
delmoi: When people talk about "the tax payer" they picture the average middle class family, but that's not where most tax revenue comes from.
Do you have statistics for this? I've heard this repeated before, but I'd like to see evidence. Sure, the rich pay far more in taxes individually, but they're also vastly outnumbered by the poor and middle class. Even if the rich do pay more, I'd be interested to see a breakdown of that - I'm willing to bet it's the more abundant lower-upper-class types, the doctors and lawyers, rather than the ultra-rich.
I'm not trying to be contrary here, and I know statistics aren't normally presented in this kind of informal atmosphere. I'm just interested in seeing them, if you have them.
posted by Mitrovarr at 2:02 PM on February 8, 2009
Do you have statistics for this? I've heard this repeated before, but I'd like to see evidence. Sure, the rich pay far more in taxes individually, but they're also vastly outnumbered by the poor and middle class. Even if the rich do pay more, I'd be interested to see a breakdown of that - I'm willing to bet it's the more abundant lower-upper-class types, the doctors and lawyers, rather than the ultra-rich.
I'm not trying to be contrary here, and I know statistics aren't normally presented in this kind of informal atmosphere. I'm just interested in seeing them, if you have them.
posted by Mitrovarr at 2:02 PM on February 8, 2009
Honesty about selfishness below:
If this happens, I'll regret taking a full-ride to a small state school over attending the prestige universities that I would have required some massive loans for, oh, the rest of my life.
Not saying it's a bad idea, but one that I find incredibly depressing on a personal level.
I am vaguely offended by the idea that people I knew who put themselves into massive debt to attend better schools would walk away with the same amount of debt I did, despite making what were worse financial decisions. And would have diplomas from better known, better equipped universities.
C'est la vie.
posted by Benjy at 2:03 PM on February 8, 2009 [7 favorites]
If this happens, I'll regret taking a full-ride to a small state school over attending the prestige universities that I would have required some massive loans for, oh, the rest of my life.
Not saying it's a bad idea, but one that I find incredibly depressing on a personal level.
I am vaguely offended by the idea that people I knew who put themselves into massive debt to attend better schools would walk away with the same amount of debt I did, despite making what were worse financial decisions. And would have diplomas from better known, better equipped universities.
C'est la vie.
posted by Benjy at 2:03 PM on February 8, 2009 [7 favorites]
I appreciate what this guys is trying to do, but this isn't any better than the pork ridden stimulus bill being debated right now.
If you're dying of starvation, a little pork would be a good thing, don't you think? Anyway, what is or is not "pork" is a matter of opinion, but republicans have done a good job of fooling people into thinking that the stimulus bill is "pork ridden", but the governments pending will create or save jobs for sure.
Normally when people say "Pork" they mean pet projects that senators and congresspeople bring back to their districts. There isn't much of that in the bill at all. If they just mean government spending on projects, then obviously there would be quite a bit. But whether or a project is pork makes no difference in determining whether or not it saves a job. In particular aide to states, which makes up the bulk of the spending will definitely save jobs that are on the chopping block today.
posted by delmoi at 2:03 PM on February 8, 2009 [1 favorite]
If you're dying of starvation, a little pork would be a good thing, don't you think? Anyway, what is or is not "pork" is a matter of opinion, but republicans have done a good job of fooling people into thinking that the stimulus bill is "pork ridden", but the governments pending will create or save jobs for sure.
Normally when people say "Pork" they mean pet projects that senators and congresspeople bring back to their districts. There isn't much of that in the bill at all. If they just mean government spending on projects, then obviously there would be quite a bit. But whether or a project is pork makes no difference in determining whether or not it saves a job. In particular aide to states, which makes up the bulk of the spending will definitely save jobs that are on the chopping block today.
posted by delmoi at 2:03 PM on February 8, 2009 [1 favorite]
Okay. My interest rate is something absurdly low like 1.5% or maybe even less on my US Dept. of Ed. Loan. For a while, I worked a job at which I wasn't sure month-to-month if I'd get a paycheck (or on time). My student loan was the one creditor that pleasantly worked with me the arrange for late payment or temporary deferment. It's one of the easiest ways to build a good credit rating. I'll keep it.
American Express, on the other hand... if Uncle Sam wants to settle up that debt for me, I'd be much obliged!
posted by sadiehawkinstein at 2:06 PM on February 8, 2009
American Express, on the other hand... if Uncle Sam wants to settle up that debt for me, I'd be much obliged!
posted by sadiehawkinstein at 2:06 PM on February 8, 2009
Let's not forget the kids who said "no" to college and, instead, opted for technical school to learn a trade. Priced those schools lately? A complete cycle at a tech school can easily cost a kid what a year at a really good private college does. The big difference in financing is that tech schools tend not to be on standard semester schedules, so a federal loan doesn't cover as much of the cost. This makes it necessary for the kids to privately finance a larger portion of the tuition to a tech school. The upshot is that you have kids going into relatively low-paying professions carrying tens-of-thousands in higher interest loans.
Education needs to be looked upon as a national investment and supported in that manner, by both government and business. Business, especially, is very fond of bitching about how poorly prepared and trained US students are. This is Microsoft's perennial complaint when they lobby for increased numbers of H1b's. Well, make business put their money where their mouths are and start supporting education. And not just so they can slap a logo on a building.
As long as student loans remain uniquely exempt from bankruptcy forgiveness, I'm all for anything that will help people get out from under the debt.
posted by Thorzdad at 2:08 PM on February 8, 2009 [1 favorite]
Education needs to be looked upon as a national investment and supported in that manner, by both government and business. Business, especially, is very fond of bitching about how poorly prepared and trained US students are. This is Microsoft's perennial complaint when they lobby for increased numbers of H1b's. Well, make business put their money where their mouths are and start supporting education. And not just so they can slap a logo on a building.
As long as student loans remain uniquely exempt from bankruptcy forgiveness, I'm all for anything that will help people get out from under the debt.
posted by Thorzdad at 2:08 PM on February 8, 2009 [1 favorite]
Well yeah, hell, while we're printing money and throwing it around like dhimmis let's pay my student loans and just put me on a fat welfare check. It's the American dream baby. I promise to live green.
posted by dawson at 2:08 PM on February 8, 2009
posted by dawson at 2:08 PM on February 8, 2009
"Forgiving student loan debt to stimulate the economy is an idea that seems to be gaining some ground recently"
Yeah I would think free money would be pretty damn popular.
posted by aerotive at 2:13 PM on February 8, 2009
Yeah I would think free money would be pretty damn popular.
posted by aerotive at 2:13 PM on February 8, 2009
Do you have statistics for this? I've heard this repeated before, but I'd like to see evidence. Sure, the rich pay far more in taxes individually, but they're also vastly outnumbered by the poor and middle class.
Yes, but they have vastly more money then the poor and middle class. For example, in the US the top 10% of the population controls 78% of the wealth. And the top 1% controls 38% of the wealth. Of course, income and wealth are not the same, and many rich people simply have a lot of money but don't necessarily have income.
Anyway, quick Googling found this chart in a Washington post article, which shows that the top 20% of income earners paid 64% of taxes in 2004 and 63.5 in 2004.
posted by delmoi at 2:13 PM on February 8, 2009 [1 favorite]
Yes, but they have vastly more money then the poor and middle class. For example, in the US the top 10% of the population controls 78% of the wealth. And the top 1% controls 38% of the wealth. Of course, income and wealth are not the same, and many rich people simply have a lot of money but don't necessarily have income.
Anyway, quick Googling found this chart in a Washington post article, which shows that the top 20% of income earners paid 64% of taxes in 2004 and 63.5 in 2004.
posted by delmoi at 2:13 PM on February 8, 2009 [1 favorite]
Yes I'm sure your brain is privy to such poetic concepts that are capturable only through spoken word and artful gesticulation, but the reality is you're only masturbating yourself and your students think you're an insufferable bore.
That's some nasty vitriol to throw at someone you've never met and whose dedication to his profession you aren't in the slightest bit able to gauge. Clearly you're working out some issues of your own on this page. Best of luck with that.
Honestly.
posted by felix betachat at 2:14 PM on February 8, 2009 [12 favorites]
That's some nasty vitriol to throw at someone you've never met and whose dedication to his profession you aren't in the slightest bit able to gauge. Clearly you're working out some issues of your own on this page. Best of luck with that.
Honestly.
posted by felix betachat at 2:14 PM on February 8, 2009 [12 favorites]
I've heard this repeated before, but I'd like to see evidence.
According to the first hit on google (this), the breakdown in 1999 went:
Incomes between $120K and $168K paid 16%. (This was the bottom half of the top 20% quintile)
Incomes between $168K and $244K paid 13%. (This was bottom half of the top 10% segment)
Incomes between $244K and $719K paid 21% (This was the top 5% less the top 1%).
Incomes over $719K paid 29%. (Top 1%).
Cumulatively the income taxes followed the 80-20 pareto principle, the top 20% carried 78% of the income tax burden.
The latter shouldn't be surprising given the l curve distribution of incomes.
posted by troy at 2:18 PM on February 8, 2009
According to the first hit on google (this), the breakdown in 1999 went:
Incomes between $120K and $168K paid 16%. (This was the bottom half of the top 20% quintile)
Incomes between $168K and $244K paid 13%. (This was bottom half of the top 10% segment)
Incomes between $244K and $719K paid 21% (This was the top 5% less the top 1%).
Incomes over $719K paid 29%. (Top 1%).
Cumulatively the income taxes followed the 80-20 pareto principle, the top 20% carried 78% of the income tax burden.
The latter shouldn't be surprising given the l curve distribution of incomes.
posted by troy at 2:18 PM on February 8, 2009
If this were a stimulative thing for the economy, and it were retroactively applied to those who have paid into loans for, say, the last 20 years, then that'd be cool. But it's not particularly likely to provide much stimulus per dollar. And no way can they afford to void 20 years of loans and return whatever anyone paid for education during that time. Kinda unfair to take the money from people who've responsibly paid their loans and give it to those who aren't responsible.
This proposal basically takes the money from retired loans and gives it to people who still owe, with the difference charged to our children. That's bad for those who paid their loans, it's bad for our kids, and it encourages irresponsibility too. A lot NOT to like about this idea.
Also...slippery slope. Why not forgive debt on cars and houses too? Heck, let's just wipe out Social Security while we're at it and eradicate that debt to ourselves. That'd save TRILLIONS.
posted by jamstigator at 2:19 PM on February 8, 2009
This proposal basically takes the money from retired loans and gives it to people who still owe, with the difference charged to our children. That's bad for those who paid their loans, it's bad for our kids, and it encourages irresponsibility too. A lot NOT to like about this idea.
Also...slippery slope. Why not forgive debt on cars and houses too? Heck, let's just wipe out Social Security while we're at it and eradicate that debt to ourselves. That'd save TRILLIONS.
posted by jamstigator at 2:19 PM on February 8, 2009
I'd rather taxpayer's payed for this than decades worth of military debt. I know that my fiance and I would spend more money if we had it. As it is it's almost check to check.
I like the Howard Dean idea Delmoi mentioned.
posted by schyler523 at 2:19 PM on February 8, 2009
I like the Howard Dean idea Delmoi mentioned.
posted by schyler523 at 2:19 PM on February 8, 2009
Of course some of you are in favor of this - it benefits you if you've got student loans. Just like the mortgage interest deduction benefits home owners, just as the financial bailouts have benefitted Wall Street.
Since this bullshit started we now have the car rental industry lobbying for a bailout, we have the homebuilders lobbying for a bailout, we have the goddamned PORN INDUSTRY lobbying for a bailout (albeit, tongue in cheek, but well played on their part), the aviation industry received theirs, post 2001 and was again clamoring for help last year. The automakers are looking for and have already received bailouts....and now the auto parts SUPPLIERS are looking for a bailout.
The list is endless, and grows more comical each day. Put simply: the bailouts must end if we want the entire system to rebalance properly.
Everyone would love to have their debts wiped out, and if the United States government continues down this path then quite possibly we're looking at a need for the US to simply declare a debt "jubilee" and default on *all* debts to wipe the system clean. I only partially joke here, but if the whole pile gets so large that this becomes the only solution, lord help us all.
If you take out a loan, your duty is to pay it back. Perhaps it's a bit too black and white, and there are extenuating circumstances for all, but the principle remains the same: loans taken should be paid back, not simply wiped away with the drop of a gavel and signature on a piece of paper. It's as wrong as the behavior of the asshats who got us into this financial mess.
I would have loved to have the government wipe out my $30,000 in student loans, but I already paid them back. I would love to have them cut the principle owed on my mortgage. I would love to have them payoff my car loan and hold my natural gas bill down during this freakin' freezing winter.
My overwrought, apocalyptic thought about these kinds of actions is that if we have a government that can simply make debts disappear (and, apparently, print money from trees), then what is to stop them from fleecing us of everything we have? Not a whole heck of a lot if we let them.
It's just wrong.
posted by tgrundke at 2:20 PM on February 8, 2009 [23 favorites]
Since this bullshit started we now have the car rental industry lobbying for a bailout, we have the homebuilders lobbying for a bailout, we have the goddamned PORN INDUSTRY lobbying for a bailout (albeit, tongue in cheek, but well played on their part), the aviation industry received theirs, post 2001 and was again clamoring for help last year. The automakers are looking for and have already received bailouts....and now the auto parts SUPPLIERS are looking for a bailout.
The list is endless, and grows more comical each day. Put simply: the bailouts must end if we want the entire system to rebalance properly.
Everyone would love to have their debts wiped out, and if the United States government continues down this path then quite possibly we're looking at a need for the US to simply declare a debt "jubilee" and default on *all* debts to wipe the system clean. I only partially joke here, but if the whole pile gets so large that this becomes the only solution, lord help us all.
If you take out a loan, your duty is to pay it back. Perhaps it's a bit too black and white, and there are extenuating circumstances for all, but the principle remains the same: loans taken should be paid back, not simply wiped away with the drop of a gavel and signature on a piece of paper. It's as wrong as the behavior of the asshats who got us into this financial mess.
I would have loved to have the government wipe out my $30,000 in student loans, but I already paid them back. I would love to have them cut the principle owed on my mortgage. I would love to have them payoff my car loan and hold my natural gas bill down during this freakin' freezing winter.
My overwrought, apocalyptic thought about these kinds of actions is that if we have a government that can simply make debts disappear (and, apparently, print money from trees), then what is to stop them from fleecing us of everything we have? Not a whole heck of a lot if we let them.
It's just wrong.
posted by tgrundke at 2:20 PM on February 8, 2009 [23 favorites]
The big problem with deferments is that your interest gets capitalized anyway. So you have people for whom a large chunk of their student loan balance is compound interest anyway.
I don't know. When the mortgage crisis hit there were broad calls for consumer relief and protection measures that would be a compromise between the needs of both the lender and the borrower based on the premise that homelessness was potentially a bigger problem than reduced ROI for borrowers.
And let's not forget, when bankruptcy law was "reformed" under the last administration, student loan companies were among the few lenders who can avoid that entire process.
posted by KirkJobSluder at 2:22 PM on February 8, 2009
I don't know. When the mortgage crisis hit there were broad calls for consumer relief and protection measures that would be a compromise between the needs of both the lender and the borrower based on the premise that homelessness was potentially a bigger problem than reduced ROI for borrowers.
And let's not forget, when bankruptcy law was "reformed" under the last administration, student loan companies were among the few lenders who can avoid that entire process.
posted by KirkJobSluder at 2:22 PM on February 8, 2009
and many rich people simply have a lot of money but don't necessarily have income.
This should now be impossible since it is possible to distribute $50M into FDIC-backed accounts and earn over $800K/yr at 1.65%.
Now if they've invested in a lot of Florida swampland then yes, their wealth may be not throwing off much cash at the moment.
posted by troy at 2:22 PM on February 8, 2009
This should now be impossible since it is possible to distribute $50M into FDIC-backed accounts and earn over $800K/yr at 1.65%.
Now if they've invested in a lot of Florida swampland then yes, their wealth may be not throwing off much cash at the moment.
posted by troy at 2:22 PM on February 8, 2009
Before college, I made $7-$8 per hour. After college, I made... well, significantly more. Accordingly, I pay more in taxes, plus I spend a lot more. I don't have any moral problem with my loans being forgiven, but I do not feel entitled to forgiveness.
posted by desjardins at 2:25 PM on February 8, 2009 [2 favorites]
posted by desjardins at 2:25 PM on February 8, 2009 [2 favorites]
As mentioned upthread, the UK and Europe have publicly funded universities, if that's too hard for the libertarians on this thread to wrap their minds around. If a true libertarian model applied, we wouldn't have public K-12 schools, either.
posted by bad grammar at 2:28 PM on February 8, 2009 [1 favorite]
posted by bad grammar at 2:28 PM on February 8, 2009 [1 favorite]
Oooh! Oooh! Oooh! Let's all just take a Mulligan!
A hard restart. Clean slate. Do-over. But we get to keep all the junk we have, because we can't survive without all the stuff we can't seem to pay for.
The weird part is, though, somebody's going to pay for it somehow. Even if it's indirectly.
posted by sadiehawkinstein at 2:29 PM on February 8, 2009
A hard restart. Clean slate. Do-over. But we get to keep all the junk we have, because we can't survive without all the stuff we can't seem to pay for.
The weird part is, though, somebody's going to pay for it somehow. Even if it's indirectly.
posted by sadiehawkinstein at 2:29 PM on February 8, 2009
My overwrought, apocalyptic thought about these kinds of actions is that if we have a government that can simply make debts disappear (and, apparently, print money from trees), then what is to stop them from fleecing us of everything we have? Not a whole heck of a lot if we let them.
What would be the point in them fleecing you? I mean, who would they give the money too? And furthermore, even if they couldn't forgive people's debts, they could still steal all your money if they wanted: Just look at the wallstreet bailout.
posted by delmoi at 2:30 PM on February 8, 2009
What would be the point in them fleecing you? I mean, who would they give the money too? And furthermore, even if they couldn't forgive people's debts, they could still steal all your money if they wanted: Just look at the wallstreet bailout.
posted by delmoi at 2:30 PM on February 8, 2009
then what is to stop them from fleecing us of everything we have? Not a whole heck of a lot if we let them.
"If the government is big enough to give you everything you want, it is big enough to take away everything you have." -- Gerald Ford
Now, of course, landowners have been pocketing the bountiful gains of taxpayer spending on capital improvements near their properties for centuries now, but come to them with a taxbill and they'll squawk "the unearned increment is MINE!".
posted by troy at 2:30 PM on February 8, 2009
"If the government is big enough to give you everything you want, it is big enough to take away everything you have." -- Gerald Ford
Now, of course, landowners have been pocketing the bountiful gains of taxpayer spending on capital improvements near their properties for centuries now, but come to them with a taxbill and they'll squawk "the unearned increment is MINE!".
posted by troy at 2:30 PM on February 8, 2009
I'd be super in favor of a federal law that capped credit card interest at 5% above the prime rate
Rep. Hinchey had a similar idea (although he would just cap it at 20%) last year. Maybe he'll reintroduce it.
posted by naoko at 2:32 PM on February 8, 2009
Rep. Hinchey had a similar idea (although he would just cap it at 20%) last year. Maybe he'll reintroduce it.
posted by naoko at 2:32 PM on February 8, 2009
This should now be impossible since it is possible to distribute $50M into FDIC-backed accounts and earn over $800K/yr at 1.65%.
Er right, I just meant they didn't have a lot of income. Someone making interest on 50 million has a lot more wealth then someone who has an $800k job, but the person with $50 million in the bank pays less in taxes, because capital gains are taxed at a lower rate then real income.
posted by delmoi at 2:32 PM on February 8, 2009
Er right, I just meant they didn't have a lot of income. Someone making interest on 50 million has a lot more wealth then someone who has an $800k job, but the person with $50 million in the bank pays less in taxes, because capital gains are taxed at a lower rate then real income.
posted by delmoi at 2:32 PM on February 8, 2009
"If the government Free Market is big enough to give you everything you want, it is big enough to take away everything you have." -- Gerald Ford
Fixed that for him.
posted by delmoi at 2:34 PM on February 8, 2009 [7 favorites]
Fixed that for him.
posted by delmoi at 2:34 PM on February 8, 2009 [7 favorites]
The bottom line is that too many Americans want money for nothin' and chicks for free.
posted by dawson at 2:35 PM on February 8, 2009 [2 favorites]
posted by dawson at 2:35 PM on February 8, 2009 [2 favorites]
I wonder if a better idea wouldn't be to hire all of the unemployed/underemployed college grads with loan burden to work on projects for the public good. That way, they can get a decent income to pay off their debts, and we can all benefit from their contributions.
This is what they really signed off for, when they got a student loan - the assumption that their degree would help them get a good job that would allow them to pay off their loans without hardship. Where this broke down is not so much the loan as it is the employment market. It might be better to address it there. After all, while a person who cannot get a decently paying job to pay off a student loan will be better off if the loan is gone, they'll be even better off if they get that decent job they'd been hoping for all along.
posted by Mitrovarr at 2:36 PM on February 8, 2009 [16 favorites]
This is what they really signed off for, when they got a student loan - the assumption that their degree would help them get a good job that would allow them to pay off their loans without hardship. Where this broke down is not so much the loan as it is the employment market. It might be better to address it there. After all, while a person who cannot get a decently paying job to pay off a student loan will be better off if the loan is gone, they'll be even better off if they get that decent job they'd been hoping for all along.
posted by Mitrovarr at 2:36 PM on February 8, 2009 [16 favorites]
THAT is what needs to change, right there in delmoi's comment: capital gains need to be treated as income. That alone, just that one thing, would be a tremendous benefit to the common man. Rich people, feel free to disagree. But us poor folks outnumber you and our numbers increase every day.
posted by jamstigator at 2:38 PM on February 8, 2009 [1 favorite]
posted by jamstigator at 2:38 PM on February 8, 2009 [1 favorite]
I admit it makes my teeth grind--my daughter got a good student fellowship and we paid her tuition by the month; in turn she worked her way through college and lived on ramen so that she didn't end up with more than $16,000 in debt, and as part of what we promised her I've been making small steady payments on it while she was working her way through grad school on a fellowship, on deferment, so that now it's less than 10,000--and if now they're going to forgive the loans for all the people who borrowed enough for the whole shebang instead of pinching pennies, then she (and we) wouldn't have had to go through being so darn tight for so darn long . . .
. . . and she wouldn't know so much about living on nothing, paying your debts, and getting good value for your money. Hm. We win.
posted by Peach at 2:39 PM on February 8, 2009 [2 favorites]
. . . and she wouldn't know so much about living on nothing, paying your debts, and getting good value for your money. Hm. We win.
posted by Peach at 2:39 PM on February 8, 2009 [2 favorites]
I was one of those lucky people who escaped college and grad school (back in the 80s and early 90s) without any loan debt. The amount of freedom I've been afforded by not having to pay off loans is amazing, and I know it's luck and not good planning on my part that made it possible.
A young friend of mine told me she had $70K in loan debt for school that she's just recently graduated from. She'll never get out from under that debt in this economy. Maybe she should have known to make a better decision at 18, but everyone tells you that you have to go to the best school ever and you'll for sure get a fantastic job to pay it off. You don't expect to come out of school into a recession/depression and end up working two jobs (kindergarten teacher's aide and bookstore clerk) and living with your grandmother to make ends meet.
Debt forgiveness may be a moral hazard, but there would certainly be a stimulative effect if people had the money they put into student loans to spend, or even part of it. In principle, at least partial debt forgiveness sounds like a great idea.
posted by immlass at 2:39 PM on February 8, 2009 [1 favorite]
A young friend of mine told me she had $70K in loan debt for school that she's just recently graduated from. She'll never get out from under that debt in this economy. Maybe she should have known to make a better decision at 18, but everyone tells you that you have to go to the best school ever and you'll for sure get a fantastic job to pay it off. You don't expect to come out of school into a recession/depression and end up working two jobs (kindergarten teacher's aide and bookstore clerk) and living with your grandmother to make ends meet.
Debt forgiveness may be a moral hazard, but there would certainly be a stimulative effect if people had the money they put into student loans to spend, or even part of it. In principle, at least partial debt forgiveness sounds like a great idea.
posted by immlass at 2:39 PM on February 8, 2009 [1 favorite]
Howard Dean had this idea back in 2004: Make student loan payment a part of the tax system, kind of like social security.
First invented by Milton Friedman in the 50's, and actually implemented by Bruce Chapman in Australia in 1989 (known as HECS, now HELP - Higher Education Loan Program). Revisited in the US a number of times, but suffers from the same evil socialist reputation as universal healthcare.
posted by jacalata at 2:40 PM on February 8, 2009
First invented by Milton Friedman in the 50's, and actually implemented by Bruce Chapman in Australia in 1989 (known as HECS, now HELP - Higher Education Loan Program). Revisited in the US a number of times, but suffers from the same evil socialist reputation as universal healthcare.
posted by jacalata at 2:40 PM on February 8, 2009
Mitrovarr
excellent, perhaps two years of Peace Corps service. That way, something would be gained for the money someone spent, we who benefited from the low-interest loans would appreciate the opportunities we were given, and others in the 'global community' would be served.
None of this waving of the magic wand, real life doesn't work that way.
posted by dawson at 2:41 PM on February 8, 2009
excellent, perhaps two years of Peace Corps service. That way, something would be gained for the money someone spent, we who benefited from the low-interest loans would appreciate the opportunities we were given, and others in the 'global community' would be served.
None of this waving of the magic wand, real life doesn't work that way.
posted by dawson at 2:41 PM on February 8, 2009
I was one of those lucky people who escaped college and grad school (back in the 80s and early 90s) without any loan debt
yes, the original California Master Plan was subsidized education in the UC system. I started in Fall 1985, close enough to the Prop 13 sea change not to have it significantly effect tuition yet, so my fees were $432/quarter starting out, or ~8 hrs of P/T work per week.
Now fees are $2770/quarter, 40hrs of "P/T" work per week.
posted by troy at 2:45 PM on February 8, 2009 [3 favorites]
yes, the original California Master Plan was subsidized education in the UC system. I started in Fall 1985, close enough to the Prop 13 sea change not to have it significantly effect tuition yet, so my fees were $432/quarter starting out, or ~8 hrs of P/T work per week.
Now fees are $2770/quarter, 40hrs of "P/T" work per week.
posted by troy at 2:45 PM on February 8, 2009 [3 favorites]
The Scottish government promised to do just this in its election campaign, but shelved the promise within 0.0002s of actually getting elected.
Bastards.
posted by bonaldi at 2:47 PM on February 8, 2009
Bastards.
posted by bonaldi at 2:47 PM on February 8, 2009
I repeat that the most effective use for this money is reducing the tuition of current students in technical fields.
Just consider : A loan forgiveness program doesn't improve any enable any better decisions now because all the decisions have already been made. You might create more home buyers, but they'll still face the threat of lay offs. By comparison, if you shave $3k off the yearly tuition of students in the sciences, engineering, etc. then :
1) you'll see fewer people like OrangeDrink choose lesser quality schools.
2) you'll see more people seek undergrad & graduate education in these critical fields.
3) you'll relieve unemployment pressures by tempting more people back into school.
posted by jeffburdges at 2:49 PM on February 8, 2009 [4 favorites]
Just consider : A loan forgiveness program doesn't improve any enable any better decisions now because all the decisions have already been made. You might create more home buyers, but they'll still face the threat of lay offs. By comparison, if you shave $3k off the yearly tuition of students in the sciences, engineering, etc. then :
1) you'll see fewer people like OrangeDrink choose lesser quality schools.
2) you'll see more people seek undergrad & graduate education in these critical fields.
3) you'll relieve unemployment pressures by tempting more people back into school.
posted by jeffburdges at 2:49 PM on February 8, 2009 [4 favorites]
Charging interest for government loans based on publicly printed and insured money in order to improve the earning status and global competition of its citizen taxpayers is one of the most outdated corruptions of American civilization. This absurdity is compounded by encouraging underemployed defaulters to hide their taxable income.
posted by Brian B. at 2:52 PM on February 8, 2009 [3 favorites]
posted by Brian B. at 2:52 PM on February 8, 2009 [3 favorites]
Who would they give the money to, Delmoi? Well, apparently whoever screams the loudest and is the best connected wins in this country as of late, so I suppose it is whomever is screaming the loudest and best connected at that time and place.
Sure, I think it's 'better' to forgive student loans rather than pouring taxdollars down the sinkhole called Wall Street, but to me it's like saying 'Compared to Stalin, Hitler didn't kill that many people.'
Both men are bad, loan forgiveness and bailouts are bad as well - regardless who gets the money. Because no matter who gets the money, there will always then be another segment of the populace that wants theirs.
Delmoi's response brings me back around to my argument that debt forgiveness and bailouts is just bad voodoo all the way around. The money will have to be repair somehow, someday - and that someday will be significantly sooner than anyone thinks, especially if foreign creditors start balking at buying our debt. At that point, the US government will need to crank interest rates to attract capital and start taxing the hell out of citizens to fund this stuff.
There just ain't no such thing as a free lunch.
posted by tgrundke at 2:53 PM on February 8, 2009 [1 favorite]
Sure, I think it's 'better' to forgive student loans rather than pouring taxdollars down the sinkhole called Wall Street, but to me it's like saying 'Compared to Stalin, Hitler didn't kill that many people.'
Both men are bad, loan forgiveness and bailouts are bad as well - regardless who gets the money. Because no matter who gets the money, there will always then be another segment of the populace that wants theirs.
Delmoi's response brings me back around to my argument that debt forgiveness and bailouts is just bad voodoo all the way around. The money will have to be repair somehow, someday - and that someday will be significantly sooner than anyone thinks, especially if foreign creditors start balking at buying our debt. At that point, the US government will need to crank interest rates to attract capital and start taxing the hell out of citizens to fund this stuff.
There just ain't no such thing as a free lunch.
posted by tgrundke at 2:53 PM on February 8, 2009 [1 favorite]
None of this waving of the magic wand, real life doesn't work that way.
Well, it sure does if you're AIG. I guess we live by a different set of standards..."too small to succeed" has a certain ring to it.
posted by kittens for breakfast at 2:55 PM on February 8, 2009 [4 favorites]
Well, it sure does if you're AIG. I guess we live by a different set of standards..."too small to succeed" has a certain ring to it.
posted by kittens for breakfast at 2:55 PM on February 8, 2009 [4 favorites]
Anyway, the stimulative effect of student loan forgiveness is those people buy more from other poor people, rather than paying some rich bank. You can clearly achieve exactly this more cheaply by postponing the debts without actually paying them off.
posted by jeffburdges at 2:55 PM on February 8, 2009
posted by jeffburdges at 2:55 PM on February 8, 2009
capital gains are taxed at a lower rate then real income
kinda an aside I guess, but capital gains come with risk, as last year so powerfully demonstrated.
Interest income from risk-free savings is taxed at ordinary income tax rates.
When I was a child I instinctively/naively thought it was unfair that capital paid less tax rate than labor, but now I know better: a man lending capital to another is performing a good deed and should not be punished with taxes. (Before discovering Georgism I had no philosophical framework to separate the "honest" capitalist from the rapacious monopolist, but now I understand that rents should not be confused with interest.)
posted by troy at 2:57 PM on February 8, 2009
kinda an aside I guess, but capital gains come with risk, as last year so powerfully demonstrated.
Interest income from risk-free savings is taxed at ordinary income tax rates.
When I was a child I instinctively/naively thought it was unfair that capital paid less tax rate than labor, but now I know better: a man lending capital to another is performing a good deed and should not be punished with taxes. (Before discovering Georgism I had no philosophical framework to separate the "honest" capitalist from the rapacious monopolist, but now I understand that rents should not be confused with interest.)
posted by troy at 2:57 PM on February 8, 2009
It seems to me a fantastic idea for stimulating the economy.
Wouldn't it be ideal to put money back into the pockets of the most educated class of people? Isn't that synonymous with stimulating educated spending? Rather than having tax rebate cheques going to everyone and being spent in benign or irresponsible ways, students would be able to get on in their lives and impact the economical sphere in all kinds of clever, and likely positive, ways.
posted by tybeet at 3:00 PM on February 8, 2009
Wouldn't it be ideal to put money back into the pockets of the most educated class of people? Isn't that synonymous with stimulating educated spending? Rather than having tax rebate cheques going to everyone and being spent in benign or irresponsible ways, students would be able to get on in their lives and impact the economical sphere in all kinds of clever, and likely positive, ways.
posted by tybeet at 3:00 PM on February 8, 2009
There just ain't no such thing as a free lunch.
Of course raising the discussion of economic rent is the greatest challenge of all! To neoclassical economists, it is a trivial factor if it exists at all! As long as this view holds Georgists will be at a loss to make ourselves part of the public dialogue. But if first we are able to demonstrate its magnitude, the question immediately arises as to who is entitled to it. Who, in a word, should get the "free lunch." These words are becoming better known, ironically due to Milton Friedman's popularization in his book, "There is No Free Lunch." Georgists both know there's a free lunch but know who is now getting it! 1
posted by troy at 3:00 PM on February 8, 2009
Of course raising the discussion of economic rent is the greatest challenge of all! To neoclassical economists, it is a trivial factor if it exists at all! As long as this view holds Georgists will be at a loss to make ourselves part of the public dialogue. But if first we are able to demonstrate its magnitude, the question immediately arises as to who is entitled to it. Who, in a word, should get the "free lunch." These words are becoming better known, ironically due to Milton Friedman's popularization in his book, "There is No Free Lunch." Georgists both know there's a free lunch but know who is now getting it! 1
posted by troy at 3:00 PM on February 8, 2009
You borrow money, you pay it back. Period.
Enough of reinforcing bad habits.
Ah, thanks oh wise GW generation, whose actions always match your rhetoric.
I have paid my student loans back, the amount borrowed anyway twice, but with interest I will be paying it back two more times, to bankers who have lost billions in... bad loans!
But then, I was from a lower middle class family of immigrants who couldn't contribute to my education thus requiring me to work 20-30 hours a week throughout my entire college tenure and take student loans to get (what i thought was) the best education I could. So I must have deserved it for not falling in line at the factory.
Your bootstrap ideals only bolster iniquity. Meanwhile, we have an educated, motivated, potentially productive cross-section of our population strangled with monthly payments to rival rent (my rent was always far less than loan payments) at exactly that point at which they decide how they will contribute to society. Brilliant!
posted by sarcasman at 3:01 PM on February 8, 2009 [13 favorites]
Enough of reinforcing bad habits.
Ah, thanks oh wise GW generation, whose actions always match your rhetoric.
I have paid my student loans back, the amount borrowed anyway twice, but with interest I will be paying it back two more times, to bankers who have lost billions in... bad loans!
But then, I was from a lower middle class family of immigrants who couldn't contribute to my education thus requiring me to work 20-30 hours a week throughout my entire college tenure and take student loans to get (what i thought was) the best education I could. So I must have deserved it for not falling in line at the factory.
Your bootstrap ideals only bolster iniquity. Meanwhile, we have an educated, motivated, potentially productive cross-section of our population strangled with monthly payments to rival rent (my rent was always far less than loan payments) at exactly that point at which they decide how they will contribute to society. Brilliant!
posted by sarcasman at 3:01 PM on February 8, 2009 [13 favorites]
Troy -
Great point there. The vast majority of the capital in this country is used honestly, and does in fact entail a large amount of risk. Just ask anyone who lent money to a relative or friend trying to start a business, or conversely, who lent money to a relative or friend only to never see it paid back.
There's a lot of risk there.
The asshats on Wall Street? Not so honest. They made money out of thin air through ponzi schemes, derivatives and credit, all based on whimsy and fast talk. They didn't lose their own money, they lost *other peoples'* capital.
posted by tgrundke at 3:02 PM on February 8, 2009
Great point there. The vast majority of the capital in this country is used honestly, and does in fact entail a large amount of risk. Just ask anyone who lent money to a relative or friend trying to start a business, or conversely, who lent money to a relative or friend only to never see it paid back.
There's a lot of risk there.
The asshats on Wall Street? Not so honest. They made money out of thin air through ponzi schemes, derivatives and credit, all based on whimsy and fast talk. They didn't lose their own money, they lost *other peoples'* capital.
posted by tgrundke at 3:02 PM on February 8, 2009
I repeat that the most effective use for this money is reducing the tuition of current students in technical fields.
I think that with the recession already knocking at the door, something like what you propose has its payoff too much in the long-term.
posted by tybeet at 3:03 PM on February 8, 2009
I think that with the recession already knocking at the door, something like what you propose has its payoff too much in the long-term.
posted by tybeet at 3:03 PM on February 8, 2009
I got into Carnegie Mellon, but ended up going to a state school that gave me a full scholarship instead. I'm all for lowering the cost of education, but this is more than a little offensive to me.
posted by heathkit at 3:04 PM on February 8, 2009 [4 favorites]
posted by heathkit at 3:04 PM on February 8, 2009 [4 favorites]
If this goes through, I will use the money to buy each and every member of Metafilter an iPod.
This will never happen, although I sure wouldn't mind if the state came through with the loan repayment money that was promised with this glamourless help-the-poor job I recently took.
/still paying $2000 a month waiting for the state budget to go through
posted by Slarty Bartfast at 3:04 PM on February 8, 2009
This will never happen, although I sure wouldn't mind if the state came through with the loan repayment money that was promised with this glamourless help-the-poor job I recently took.
/still paying $2000 a month waiting for the state budget to go through
posted by Slarty Bartfast at 3:04 PM on February 8, 2009
I'd like some historical perspective on this.
At what point did loans overtake grants as the main funding vehicle for college students?
posted by jason's_planet at 3:08 PM on February 8, 2009
At what point did loans overtake grants as the main funding vehicle for college students?
posted by jason's_planet at 3:08 PM on February 8, 2009
Heathkit - similar to myself. My top schools were astronomically expensive with little in the way of financial aid or scholarships offered to me. I moved on down when the realities of how much debt I would be taking on hit me and I ended up at a smaller, excellent private school whose financial aid was significantly better. Not my top pick, but a good compromise all around.
posted by tgrundke at 3:08 PM on February 8, 2009
posted by tgrundke at 3:08 PM on February 8, 2009
a man lending capital to another is performing a good deed and should not be punished with taxes.
Debateable.
posted by Brian B. at 3:09 PM on February 8, 2009 [1 favorite]
Debateable.
posted by Brian B. at 3:09 PM on February 8, 2009 [1 favorite]
I think the point is that it doesn't stimulate the economy any more than merely freezing additional interest on those loans, tybeet, and halting or reducing the accumulation of interest for the next 4 years is much less expensive.
You can spend the rest encouraging better educational decisions now by reducing tuition for current students medical and technical fields. I'd also point out that current students will spend even more of the money than someone currently making student loan payments.
posted by jeffburdges at 3:10 PM on February 8, 2009
You can spend the rest encouraging better educational decisions now by reducing tuition for current students medical and technical fields. I'd also point out that current students will spend even more of the money than someone currently making student loan payments.
posted by jeffburdges at 3:10 PM on February 8, 2009
Well, we have student loan forgiveness coming anyway in the form of Income-Based Repayment which caps subsidized loans at a progressive percentage of household income and forgives capitalized interest and balance after 30 years of payments.
Which seems like a nice middle ground.
posted by KirkJobSluder at 3:12 PM on February 8, 2009 [2 favorites]
Which seems like a nice middle ground.
posted by KirkJobSluder at 3:12 PM on February 8, 2009 [2 favorites]
No thanks. I took out my loans knowing full well that I would have to pay them back.
See, I respect that. When this happens (and, come on - a HuffPo article, an online petition and two Facebook groups?! It's pretty much a done deal): Science!, as a taxpayer I am going to go ahead and make this right by taking over the receipt of your student loan payments. It's the least I can do.
posted by nanojath at 3:15 PM on February 8, 2009
See, I respect that. When this happens (and, come on - a HuffPo article, an online petition and two Facebook groups?! It's pretty much a done deal): Science!, as a taxpayer I am going to go ahead and make this right by taking over the receipt of your student loan payments. It's the least I can do.
posted by nanojath at 3:15 PM on February 8, 2009
I'll make my point very short since there's already been quite a bit of activity here:
I choose the college I did because it was affordable. I passed up admission to five of the top 10 computer engineering schools in the nation to go to a third tier state school. Indeed, I did this as an adult (18) since I actually believe in responsibility. I was not willing to subject my parents to pay for my own education. Since I was not willing to pay for a five-to-six figure education, my decision was quite short.
There is no way in hell I'm going to pay for anyone who voluntarily choose to overspend on what is a commodity. I also oppose the fiscal bailout. Spending money for no good reason is always a bad thing. This nation will not recover from bad fiscal decisions and policy with more bad fiscal decisions and policy.
posted by saeculorum at 3:16 PM on February 8, 2009 [2 favorites]
I choose the college I did because it was affordable. I passed up admission to five of the top 10 computer engineering schools in the nation to go to a third tier state school. Indeed, I did this as an adult (18) since I actually believe in responsibility. I was not willing to subject my parents to pay for my own education. Since I was not willing to pay for a five-to-six figure education, my decision was quite short.
There is no way in hell I'm going to pay for anyone who voluntarily choose to overspend on what is a commodity. I also oppose the fiscal bailout. Spending money for no good reason is always a bad thing. This nation will not recover from bad fiscal decisions and policy with more bad fiscal decisions and policy.
posted by saeculorum at 3:16 PM on February 8, 2009 [2 favorites]
Going back x number of years, those who paid / or are paying out of pocket for BA, get some kind of yearly claim on income tax for x number of years. The rate is scaled to amount spent, taking inflation into account.
Those in school now receive a break on tuition.
Those paying back loans get some sort of scaled loan forgiveness based on amount and interest owed.
Does this make sense to anyone? I'm just beginning to piece together an idea, but I'm no economist.
They'd have to creat a whole new Deparment to implement this.
posted by hellboundforcheddar at 3:17 PM on February 8, 2009
Those in school now receive a break on tuition.
Those paying back loans get some sort of scaled loan forgiveness based on amount and interest owed.
Does this make sense to anyone? I'm just beginning to piece together an idea, but I'm no economist.
They'd have to creat a whole new Deparment to implement this.
posted by hellboundforcheddar at 3:17 PM on February 8, 2009
and my keys are sticking
posted by hellboundforcheddar at 3:19 PM on February 8, 2009
posted by hellboundforcheddar at 3:19 PM on February 8, 2009
If the Mrs. and I get the money back from when we paid off our student loans, I promise we'll use it to buy a house. It's a win-win and we could use a six-figure handout from the government.
Back after the dotcom crash when I was unemployed for months, I don't remember anyone talking about bailing me out of my student loan payments. Luckily the government was flexible and I was able to continue payments when I got a new job. That still wasn't nearly as bad as when I was employed as a waiter fresh out of college making half of minimum wage plus tips and paying down loans. Or when my wife was fresh out of college making a pittance as a reporter for a local paper after getting a 4 year degree from a top NYC university. Somehow we paid back our loans and still managed to live through our twenties without whining too much. Or asking for more government help.
posted by ryoshu at 3:21 PM on February 8, 2009
Back after the dotcom crash when I was unemployed for months, I don't remember anyone talking about bailing me out of my student loan payments. Luckily the government was flexible and I was able to continue payments when I got a new job. That still wasn't nearly as bad as when I was employed as a waiter fresh out of college making half of minimum wage plus tips and paying down loans. Or when my wife was fresh out of college making a pittance as a reporter for a local paper after getting a 4 year degree from a top NYC university. Somehow we paid back our loans and still managed to live through our twenties without whining too much. Or asking for more government help.
posted by ryoshu at 3:21 PM on February 8, 2009
This seems like an idea everyone can get behind. It takes the roulette-style fun from the "take random economic choices and subsidize them out of proportion to potentially more prudent alternatives" philosophy of the Democrats' stimulus ideas. It adds the "give the richest half of the population money that the poorest half doesn't qualify for" philosophy of the Republican stimulus demands. But it still proudly continues the "pump more federal money into the demand side of a market with rapidly inflating prices" strategy that got us here in the first place.
However, I don't think we can get anyone to introduce it in Congress. Republicans only want to go into debt to benefit rich undereducated people, not upper middle class overeducated people. You might get them on board by pointing out that the money will technically be handed to rich loan-holding bankers, but that might spook the Democrats, who would already be wary of any stimulus idea that allows people to spend money without Congress telling them exactly what to spend it on.
posted by roystgnr at 3:23 PM on February 8, 2009 [2 favorites]
However, I don't think we can get anyone to introduce it in Congress. Republicans only want to go into debt to benefit rich undereducated people, not upper middle class overeducated people. You might get them on board by pointing out that the money will technically be handed to rich loan-holding bankers, but that might spook the Democrats, who would already be wary of any stimulus idea that allows people to spend money without Congress telling them exactly what to spend it on.
posted by roystgnr at 3:23 PM on February 8, 2009 [2 favorites]
The asshats on Wall Street? Not so honest. They made money out of thin air through ponzi schemes, derivatives and credit
There was an alleged "saving glut" looking for yield. And plenty of people who wanted to buy a better place to live and/or get rich on rising site values like their friends, and of course their was a sizable contigent of idiots looking to be the next Trump in pure real estate speculation.
Wall Street connected the two in a big way, sparking one helluva income stream. The ponzi element was just land economics, that the trees don't grow to the sky. Well, that, and criminally lax rating procedures on derivatives by the ratings firms.
This chart shows who was making money out of thin air. . .
posted by troy at 3:23 PM on February 8, 2009
There was an alleged "saving glut" looking for yield. And plenty of people who wanted to buy a better place to live and/or get rich on rising site values like their friends, and of course their was a sizable contigent of idiots looking to be the next Trump in pure real estate speculation.
Wall Street connected the two in a big way, sparking one helluva income stream. The ponzi element was just land economics, that the trees don't grow to the sky. Well, that, and criminally lax rating procedures on derivatives by the ratings firms.
This chart shows who was making money out of thin air. . .
posted by troy at 3:23 PM on February 8, 2009
Somehow we paid back our loans and still managed to live through our twenties without whining too much. Or asking for more government help.
Yes, but if you hadn't noticed there's a depression starting. That means, going forward, it's going to be much more difficult to pay back loans if they can't get a job.
But your right that this is unfair to people who have already paid back loans, or students who worked through school so they could be debt free.
posted by delmoi at 3:24 PM on February 8, 2009
Yes, but if you hadn't noticed there's a depression starting. That means, going forward, it's going to be much more difficult to pay back loans if they can't get a job.
But your right that this is unfair to people who have already paid back loans, or students who worked through school so they could be debt free.
posted by delmoi at 3:24 PM on February 8, 2009
i might not object to student loan forgiveness if it weren't for my perception that much of it could be avoided. i see a lot of problems with education, not the least of which is that everyone says they want one, but my suspicion is that most people would buy one and skip the learning part if they could.
not everyone in college should be in college. not everyone is in college because they want to be a doctor, lawyer, engineer, etc.; my suspicion is that most people are in college because true or not it's the way to earn more money, it's a way to legitimately keep yourself *out* of the work force (or at least in a career-type position) for at least 4 years, and it's a good way to meet people of the social caste students want to belong to.
i don't know about "an education is the only product you pay for where you do more work than anyone else involved ... ." if you're tops in your class, you *might* do more work than anyone else involved. or maybe not. from my college days, i seem to remember students being perfectly happy when classes were called off & when teachers went over test answers the class session before the test. maybe part of getting a student loan should be calculating the dollar value/hour of class. and if that's too difficult, they're hiring in fast food and paying $10/hour.
i don't want to get into the bailout discussion; that's part of what's wrong with america today--taking personal values from a system that repeatedly demonstrates that it has none. suck it up & pay your bills. it might not be the american way, but you might sleep a little better at night.
posted by msconduct at 3:25 PM on February 8, 2009
not everyone in college should be in college. not everyone is in college because they want to be a doctor, lawyer, engineer, etc.; my suspicion is that most people are in college because true or not it's the way to earn more money, it's a way to legitimately keep yourself *out* of the work force (or at least in a career-type position) for at least 4 years, and it's a good way to meet people of the social caste students want to belong to.
i don't know about "an education is the only product you pay for where you do more work than anyone else involved ... ." if you're tops in your class, you *might* do more work than anyone else involved. or maybe not. from my college days, i seem to remember students being perfectly happy when classes were called off & when teachers went over test answers the class session before the test. maybe part of getting a student loan should be calculating the dollar value/hour of class. and if that's too difficult, they're hiring in fast food and paying $10/hour.
i don't want to get into the bailout discussion; that's part of what's wrong with america today--taking personal values from a system that repeatedly demonstrates that it has none. suck it up & pay your bills. it might not be the american way, but you might sleep a little better at night.
posted by msconduct at 3:25 PM on February 8, 2009
This seems like an idea everyone can get behind. It takes the roulette-style fun from the "take random economic choices and subsidize them out of proportion to potentially more prudent alternatives" philosophy of the Democrats' stimulus ideas.
What exactly are the more prudent alternatives that should be funded, in your view? And how exactly should those be determined in two weeks? Or should we just analyze everything in painstaking detail for years as the economy goes down the toilet?
posted by delmoi at 3:28 PM on February 8, 2009
What exactly are the more prudent alternatives that should be funded, in your view? And how exactly should those be determined in two weeks? Or should we just analyze everything in painstaking detail for years as the economy goes down the toilet?
posted by delmoi at 3:28 PM on February 8, 2009
I'd like to emphasize one point : Obama's proposals have focussed on enabling good ideas & decisions now, like rebuild failing bridges, funding alternative energy programs, etc., while also stimulating the economy. Any "bailout" fails by this standard, even one bailing out poor people, because all the decisions have already been made.
You can't get more doctors by forgiving medical school loans, but you can get more doctors by reducing the cost of medical school, and this 2nd option will have as more stimulative effect.
posted by jeffburdges at 3:28 PM on February 8, 2009
You can't get more doctors by forgiving medical school loans, but you can get more doctors by reducing the cost of medical school, and this 2nd option will have as more stimulative effect.
posted by jeffburdges at 3:28 PM on February 8, 2009
What is it if you're filing single?
If I'm reading the worksheet correctly, $55,000.
posted by oaf at 3:31 PM on February 8, 2009
If I'm reading the worksheet correctly, $55,000.
posted by oaf at 3:31 PM on February 8, 2009
I agree with the first two posts in this topic. Both of them. Damnit.
posted by thatbrunette at 3:34 PM on February 8, 2009 [2 favorites]
posted by thatbrunette at 3:34 PM on February 8, 2009 [2 favorites]
Yes, but if you hadn't noticed there's a depression starting. That means, going forward, it's going to be much more difficult to pay back loans if they can't get a job.
Which is why we should go ahead and do something that creates jobs instead of giving another freebie to the banks. If we wipe out student debt the government is going to be paying down the loans owed to financial institutions and the college grads still won't have jobs.
Banksters win, college grads lose, and the rest of us get ripped off. Again.
If congress wants to do something about usurious interest rates on student loans, I'm all for that.
posted by ryoshu at 3:35 PM on February 8, 2009 [2 favorites]
Which is why we should go ahead and do something that creates jobs instead of giving another freebie to the banks. If we wipe out student debt the government is going to be paying down the loans owed to financial institutions and the college grads still won't have jobs.
Banksters win, college grads lose, and the rest of us get ripped off. Again.
If congress wants to do something about usurious interest rates on student loans, I'm all for that.
posted by ryoshu at 3:35 PM on February 8, 2009 [2 favorites]
kinda an aside I guess, but capital gains come with risk, as last year so powerfully demonstrated.
Well, the purpose of the cap gains tax is to get people to invest their money, but, there are capital gains loopholes that allow CEOs and the like to take compensation as stock options and therefore only pay cap gains tax on their income!
posted by delmoi at 3:35 PM on February 8, 2009
Well, the purpose of the cap gains tax is to get people to invest their money, but, there are capital gains loopholes that allow CEOs and the like to take compensation as stock options and therefore only pay cap gains tax on their income!
posted by delmoi at 3:35 PM on February 8, 2009
You can't get more doctors by forgiving medical school loans, but you can get more doctors by reducing the cost of medical school, and this 2nd option will have as more stimulative effect.
I just don't know that that's true. Ask anyone who has taken the path from high-school to med-school whether debt was on their mind when they entered into it (likewise, ask anyone who has entered into serious credit-card debt whether debt was on their mind before they entered into it), and you'll get answers in the negative. Finances enter the equation... when they become a problem, and when you have to start working your way through them. Economics are rarely premeditated when it comes to higher-education, and maybe that's a problem of education about the very issues themselves... who knows.
posted by tybeet at 3:38 PM on February 8, 2009
I just don't know that that's true. Ask anyone who has taken the path from high-school to med-school whether debt was on their mind when they entered into it (likewise, ask anyone who has entered into serious credit-card debt whether debt was on their mind before they entered into it), and you'll get answers in the negative. Finances enter the equation... when they become a problem, and when you have to start working your way through them. Economics are rarely premeditated when it comes to higher-education, and maybe that's a problem of education about the very issues themselves... who knows.
posted by tybeet at 3:38 PM on February 8, 2009
Well, the purpose of the cap gains tax is to get people to invest their money, but, there are capital gains loopholes that allow CEOs and the like to take compensation as stock options and therefore only pay cap gains tax on their income!
Sure, but those CEOs use their income to pay $2,000/hr hookers which creates blow jobs. Instant stimulus!
posted by ryoshu at 3:39 PM on February 8, 2009 [1 favorite]
Sure, but those CEOs use their income to pay $2,000/hr hookers which creates blow jobs. Instant stimulus!
posted by ryoshu at 3:39 PM on February 8, 2009 [1 favorite]
Man, that would sort of suck for folks like me who didn't go to school because they didn't want to carry debt - or are people who opted out going to get a cheque to balance their respective incomes with that of post-secondary grads?
'Cuz I would be down with that.
posted by Alvy Ampersand at 3:40 PM on February 8, 2009
'Cuz I would be down with that.
posted by Alvy Ampersand at 3:40 PM on February 8, 2009
I'd love this idea (I'm Canadian though) except that I'd get the shaft as I never qualified for a student loan - I was working before I went to grad school, owned a decent car etc.
I was forced to get a student line of credit from the bank, which isn't eligible for tax-free interest payments, nor would it be pardoned by anyone. How am I going to feel if a whole bunch of people get off the hook and I don't, for the sole reason that I decided to head back to school as a mature student? I'd be seriously pissed off. This program is a good one for a lot of people, but in my mind it's fairly arbitrary and certainly inequitable.
posted by jimmythefish at 3:41 PM on February 8, 2009
I was forced to get a student line of credit from the bank, which isn't eligible for tax-free interest payments, nor would it be pardoned by anyone. How am I going to feel if a whole bunch of people get off the hook and I don't, for the sole reason that I decided to head back to school as a mature student? I'd be seriously pissed off. This program is a good one for a lot of people, but in my mind it's fairly arbitrary and certainly inequitable.
posted by jimmythefish at 3:41 PM on February 8, 2009
You can't get more doctors by forgiving medical school loans, but you can get more doctors by reducing the cost of medical school, and this 2nd option will have as more stimulative effect.
It's true that the med school thing will be more stimulative, but not because we get more doctors in the end, but because it will produce more jobs at medical schools right away, while loan forgiveness will will probably just result in the money being saved in today's economy.
The basic, fundamental idea with stimulus is to do something with all the labor out there being wasted. There are people out there with skills and a willingness to work, but nothing for them to do. And the fact that people are so uncertain about the future makes them less willing to save money.
Forgiving debt doesn't really do much either, just like those $600 checks didn't do much for the economy last year.
posted by delmoi at 3:42 PM on February 8, 2009
It's true that the med school thing will be more stimulative, but not because we get more doctors in the end, but because it will produce more jobs at medical schools right away, while loan forgiveness will will probably just result in the money being saved in today's economy.
The basic, fundamental idea with stimulus is to do something with all the labor out there being wasted. There are people out there with skills and a willingness to work, but nothing for them to do. And the fact that people are so uncertain about the future makes them less willing to save money.
Forgiving debt doesn't really do much either, just like those $600 checks didn't do much for the economy last year.
posted by delmoi at 3:42 PM on February 8, 2009
they're hiring in fast food and paying $10/hour
My God, if this were true I'd go back to working in fast food. I'm stuck in the boonies running a store in the mall and I don't make this. I'm looking at deferring my student loans - again - to try to actually make a dent in the debt I took on when I was unemployed just to pay the bills.
I went to a school based purely on cost - full tuition paid - and came out of it with $20k in debt on housing and fees. In this economy, that's nothing compared to many people, and I'll still never pay it back. I'm a skilled professional in 3 different fields and I still can't make ends meet. It's not my place to say whether or not this is fair (my husband, the rich kid who went to the same college as I did and came out debt free, says if you paid your loans already, sorry but sux-2-b-u because government doesn't work that way, but I don't know if I agree), but don't tell me this won't help people in this economy. I add my voice to the list of people who could use that money to help get out from under their current situation.
posted by dust.wind.dude at 3:49 PM on February 8, 2009 [1 favorite]
My God, if this were true I'd go back to working in fast food. I'm stuck in the boonies running a store in the mall and I don't make this. I'm looking at deferring my student loans - again - to try to actually make a dent in the debt I took on when I was unemployed just to pay the bills.
I went to a school based purely on cost - full tuition paid - and came out of it with $20k in debt on housing and fees. In this economy, that's nothing compared to many people, and I'll still never pay it back. I'm a skilled professional in 3 different fields and I still can't make ends meet. It's not my place to say whether or not this is fair (my husband, the rich kid who went to the same college as I did and came out debt free, says if you paid your loans already, sorry but sux-2-b-u because government doesn't work that way, but I don't know if I agree), but don't tell me this won't help people in this economy. I add my voice to the list of people who could use that money to help get out from under their current situation.
posted by dust.wind.dude at 3:49 PM on February 8, 2009 [1 favorite]
Banksters win, college grads lose, and the rest of us get ripped off. Again.
As an added bonus, all of the normal folks who work at the banks/student loan institutions will be fired because there won't be anything for them to do anymore without those millions of loans to service.
posted by synaesthetichaze at 3:50 PM on February 8, 2009
As an added bonus, all of the normal folks who work at the banks/student loan institutions will be fired because there won't be anything for them to do anymore without those millions of loans to service.
posted by synaesthetichaze at 3:50 PM on February 8, 2009
...Accordingly, I pay more in taxes, plus I spend a lot more. I don't have any moral problem with my loans being forgiven, but I do not feel entitled to forgiveness.
The problem, aside from skyrocketing costs that are leaving kids more and more in debt, at least some of them will be graduating into a dead job market, one that may not improve for a couple of years. I don't know that we compare what happened 20 or 10 or even five years ago to what soon-to-be graduates are facing.
posted by etaoin at 3:55 PM on February 8, 2009
The problem, aside from skyrocketing costs that are leaving kids more and more in debt, at least some of them will be graduating into a dead job market, one that may not improve for a couple of years. I don't know that we compare what happened 20 or 10 or even five years ago to what soon-to-be graduates are facing.
posted by etaoin at 3:55 PM on February 8, 2009
I think higher education should be considered an investment and be free.That is obviously not the case.
Forgive student loans? Oh you poor poor babies. A Bachelor's degree earns you about $30,000 more than a High School graduate makes per year. If you were smart enough to be admitted to college you were smart enough calculate, or find out how to calculate interest.
Citing the reprehensible conduct that led to the bank bailout as justification for punishing the more responsible students who paid or are paying back their loans, as well as punishing taxpayers who may have, depending on the loan type, financed your ability to make more money is the most ridiculous argument I have ever heard.
posted by vapidave at 3:57 PM on February 8, 2009 [1 favorite]
Forgive student loans? Oh you poor poor babies. A Bachelor's degree earns you about $30,000 more than a High School graduate makes per year. If you were smart enough to be admitted to college you were smart enough calculate, or find out how to calculate interest.
Citing the reprehensible conduct that led to the bank bailout as justification for punishing the more responsible students who paid or are paying back their loans, as well as punishing taxpayers who may have, depending on the loan type, financed your ability to make more money is the most ridiculous argument I have ever heard.
posted by vapidave at 3:57 PM on February 8, 2009 [1 favorite]
delmoi: But your right that this is unfair to people who have already paid back loans, or students who worked through school so they could be debt free.
Well, I reject the notion that something must be retroactively fair given recent changes in our economic system. Furthermore, the position of student loan companies in comparison to other lenders in dealing with borrower default and hardship has been greatly privileged by law.
The bottom line is that at least for another two years, as the job market follows the housing market, you are going to have a few million grads face extended unemployment and underemployment combined with vanishing deferment options. Offering some relief from interest payments for grads experiencing significant and legitimate hardship is likely to be less expensive than the alternatives.
posted by KirkJobSluder at 4:03 PM on February 8, 2009 [1 favorite]
Well, I reject the notion that something must be retroactively fair given recent changes in our economic system. Furthermore, the position of student loan companies in comparison to other lenders in dealing with borrower default and hardship has been greatly privileged by law.
The bottom line is that at least for another two years, as the job market follows the housing market, you are going to have a few million grads face extended unemployment and underemployment combined with vanishing deferment options. Offering some relief from interest payments for grads experiencing significant and legitimate hardship is likely to be less expensive than the alternatives.
posted by KirkJobSluder at 4:03 PM on February 8, 2009 [1 favorite]
thousands of people a month are seeing their non-college educated factory jobs disappear and many of you are talking about how the more affluent and educated of yourselves can vote yourself a free lunch, i mean education
really? - you should be ashamed of yourselves
who's going to pay for all of this, anyway?
i doubt this is going to go through, but if it does and it does without some very radical changes happening in this country that benefit the real oppressed and disadvantaged - like a real living wage and real single payer health care system - then i guess the working class will just have to start fucking things up and made it impossible for everyone
i didn't vote obama and the democrats so a new group of pigs could start voting themselves largesse at the expense of everyone else - i thought we were getting change - and getting fucked over by someone else doesn't qualify
no, you want to start handing out this kind of dough to millions of people to "stimulate the economy" you can goddamned well start at the bottom, not the middle
and you wonder why the working class in this country think democrats are elitists - your answer is IN THIS THREAD - look who you're trying to bail out first
over and OUT - i'm too revolted and disgusted with this to even talk about it
posted by pyramid termite at 4:06 PM on February 8, 2009 [18 favorites]
really? - you should be ashamed of yourselves
who's going to pay for all of this, anyway?
i doubt this is going to go through, but if it does and it does without some very radical changes happening in this country that benefit the real oppressed and disadvantaged - like a real living wage and real single payer health care system - then i guess the working class will just have to start fucking things up and made it impossible for everyone
i didn't vote obama and the democrats so a new group of pigs could start voting themselves largesse at the expense of everyone else - i thought we were getting change - and getting fucked over by someone else doesn't qualify
no, you want to start handing out this kind of dough to millions of people to "stimulate the economy" you can goddamned well start at the bottom, not the middle
and you wonder why the working class in this country think democrats are elitists - your answer is IN THIS THREAD - look who you're trying to bail out first
over and OUT - i'm too revolted and disgusted with this to even talk about it
posted by pyramid termite at 4:06 PM on February 8, 2009 [18 favorites]
I make less than $50,000 and I am making my student loans. I think setting the bar lower than $150,000 would make this more palatable to me.
That said, any simple plan like this will screw somebody over. Forgive student loans: Those that didn't go to school and those that scrimped on their education will get screwed. Subsidize education on a scale that prevents student debt: those that already made the investment get screwed. Just giving everybody a check for the same amount: coming from a state that gave every citizen $1000 for heating last year, it didn't go as well as hoped.
posted by Foam Pants at 4:09 PM on February 8, 2009
That said, any simple plan like this will screw somebody over. Forgive student loans: Those that didn't go to school and those that scrimped on their education will get screwed. Subsidize education on a scale that prevents student debt: those that already made the investment get screwed. Just giving everybody a check for the same amount: coming from a state that gave every citizen $1000 for heating last year, it didn't go as well as hoped.
posted by Foam Pants at 4:09 PM on February 8, 2009
A Bachelor's degree earns you about $30,000 more than a High School graduate makes per year. If you were smart enough to be admitted to college you were smart enough calculate, or find out how to calculate interest.
That's bullshit.
I started in Fall 1985, close enough to the Prop 13 sea change not to have it significantly effect tuition yet, so my fees were $432/quarter starting out, or ~8 hrs of P/T work per week.
Now fees are $2770/quarter, 40hrs of "P/T" work per week.
How many of our current decision-makers are in this category of people who got their student loan bailouts upfront. I went to a "lesser" state school for free to avoid student loans but see enough of my peers struggling with the debt that everyone (parents, teachers, government, employers) told them would "pay for itself" in no time. This sounds like a much better proposal than handing out money to people who think $500,000 a year is too little money to do their jobs.
posted by the christopher hundreds at 4:16 PM on February 8, 2009 [2 favorites]
That's bullshit.
I started in Fall 1985, close enough to the Prop 13 sea change not to have it significantly effect tuition yet, so my fees were $432/quarter starting out, or ~8 hrs of P/T work per week.
Now fees are $2770/quarter, 40hrs of "P/T" work per week.
How many of our current decision-makers are in this category of people who got their student loan bailouts upfront. I went to a "lesser" state school for free to avoid student loans but see enough of my peers struggling with the debt that everyone (parents, teachers, government, employers) told them would "pay for itself" in no time. This sounds like a much better proposal than handing out money to people who think $500,000 a year is too little money to do their jobs.
posted by the christopher hundreds at 4:16 PM on February 8, 2009 [2 favorites]
My proposal is simply to stop fucking kidding ourselves, as a culture, about the value and use of a college degree. Instead of charging extortionate tuition so that trustees can build pretty new buildings and collectively fellate the booster club, I recommend two tracks.
First, if you're going to college to get the degree - the piece of paper - fine. No harm, no foul. You buy your fucking piece of paper. I'll even set up a payment plan that you can manage. You get a degree, and because you've got that degree, you'll get that job, or that promotion, and you'll be that much more likely to pay me back.
The monies generated from option one will pay for option two: people who go to college to get an education. Those who want to dig like mad animals, do the hard work and advance their field - they'll have that much more in the way of resources they aren't having to share with people whose mommies and daddies make them go to school, or who are bucking for a promotion to assistant to the deputy vice president of the steno pool.
The baccalaureate degree in the US has suffered from astonishing inflationary pressure, and it's worth barely a fraction of what it was even a generation ago in terms of actual buying power or standard of living differential. We will, in some fashion, at some point, look around and realize that the undergraduate degree isn't worth a fart in a hurricane. The trick isn't to make it harder to attain, however. It's to differentiate between credentialist goals and educational ones.
posted by Emperor SnooKloze at 4:16 PM on February 8, 2009 [6 favorites]
First, if you're going to college to get the degree - the piece of paper - fine. No harm, no foul. You buy your fucking piece of paper. I'll even set up a payment plan that you can manage. You get a degree, and because you've got that degree, you'll get that job, or that promotion, and you'll be that much more likely to pay me back.
The monies generated from option one will pay for option two: people who go to college to get an education. Those who want to dig like mad animals, do the hard work and advance their field - they'll have that much more in the way of resources they aren't having to share with people whose mommies and daddies make them go to school, or who are bucking for a promotion to assistant to the deputy vice president of the steno pool.
The baccalaureate degree in the US has suffered from astonishing inflationary pressure, and it's worth barely a fraction of what it was even a generation ago in terms of actual buying power or standard of living differential. We will, in some fashion, at some point, look around and realize that the undergraduate degree isn't worth a fart in a hurricane. The trick isn't to make it harder to attain, however. It's to differentiate between credentialist goals and educational ones.
posted by Emperor SnooKloze at 4:16 PM on February 8, 2009 [6 favorites]
and you wonder why the working class in this country think democrats are elitists - your answer is IN THIS THREAD - look who you're trying to bail out first.
over and OUT - i'm too revolted and disgusted with this to even talk about it
Really, I don't the majority of the people on this thread support loan forgiveness, just saying that the situation is particularly hard right now because we keep telling kids to go to school to better themselves and now the job market is in the tank. I've got relatives who have run up college debt and others who skipped college to work in the steel mill, only to find the jobs vanish.
I've found the answer about why loan forgiveness would be bad-bankers get their money but there still won't be jobs--to be especially smart.
posted by etaoin at 4:20 PM on February 8, 2009 [1 favorite]
over and OUT - i'm too revolted and disgusted with this to even talk about it
Really, I don't the majority of the people on this thread support loan forgiveness, just saying that the situation is particularly hard right now because we keep telling kids to go to school to better themselves and now the job market is in the tank. I've got relatives who have run up college debt and others who skipped college to work in the steel mill, only to find the jobs vanish.
I've found the answer about why loan forgiveness would be bad-bankers get their money but there still won't be jobs--to be especially smart.
posted by etaoin at 4:20 PM on February 8, 2009 [1 favorite]
I think that forgiving student loan debt is a much better idea than bailing out companies that are still using private jets. That's just me though, and it's probably not the kind of "either/or" situation that exists in my mind.
My main objection with student loans is how much you're required to take out in the first place. Almost no one can afford to go to a private college in the US without loans, which is fine, but when you're talking >$50,000 ... that's just insanity. I think that something needs to be done to restructure tuition prices in the US so that people who take loans are taking on an amount that they actually can pay back. It used to be that graduating college would make you competitive in the job market, but now it's such a commonplace thing that you really have to have a specialized education to get your money's worth. A specialized education that is, in itself, a HUGE investment.
Along the same lines (and I'm probably opening up a can of worms here): I'd love it if an economic stimulus package included a provision to eliminate medical debt, but I'd love it more if the health care system kept people from running up that kind of debt in the first place.
posted by grapefruitmoon at 4:21 PM on February 8, 2009
My main objection with student loans is how much you're required to take out in the first place. Almost no one can afford to go to a private college in the US without loans, which is fine, but when you're talking >$50,000 ... that's just insanity. I think that something needs to be done to restructure tuition prices in the US so that people who take loans are taking on an amount that they actually can pay back. It used to be that graduating college would make you competitive in the job market, but now it's such a commonplace thing that you really have to have a specialized education to get your money's worth. A specialized education that is, in itself, a HUGE investment.
Along the same lines (and I'm probably opening up a can of worms here): I'd love it if an economic stimulus package included a provision to eliminate medical debt, but I'd love it more if the health care system kept people from running up that kind of debt in the first place.
posted by grapefruitmoon at 4:21 PM on February 8, 2009
I guess this is a big deal for some people, but is student debt taking a huge chunk out of most people's income?
By the time I am done with grad school I will have amassed student loan debt in excess of $82,000, even if tuition prices were frozen at today's levels. That'll work out to at least $950 a month for 10 years.
So the answer to your question is: Yes.
posted by fusinski at 4:22 PM on February 8, 2009
By the time I am done with grad school I will have amassed student loan debt in excess of $82,000, even if tuition prices were frozen at today's levels. That'll work out to at least $950 a month for 10 years.
So the answer to your question is: Yes.
posted by fusinski at 4:22 PM on February 8, 2009
Um... Science!... we're not talking about people "walking away from their debts" - we're talking about the government forgiving them.
How, again, is this an insult to the taxpayer - particularly compared with the bailout?
I note you didn't comment on the Republicanism...
posted by lupus_yonderboy at 4:26 PM on February 8, 2009
How, again, is this an insult to the taxpayer - particularly compared with the bailout?
I note you didn't comment on the Republicanism...
posted by lupus_yonderboy at 4:26 PM on February 8, 2009
pyramid termite: You know, it doesn't matter what you think about it:
1) the number of people unable to make their loan payments is going to grow over the next two years along with the unemployment rate
2) the deferment clock is already ticking for most of them
Our options are pretty much as follows, 1) attempt to squeeze blood from a turnip when deferment time expires, 2) extend deferment clocks, 3) offer some sort of legal relief/forgiveness.
No matter how you look at it, someone is screwed.
posted by KirkJobSluder at 4:26 PM on February 8, 2009
1) the number of people unable to make their loan payments is going to grow over the next two years along with the unemployment rate
2) the deferment clock is already ticking for most of them
Our options are pretty much as follows, 1) attempt to squeeze blood from a turnip when deferment time expires, 2) extend deferment clocks, 3) offer some sort of legal relief/forgiveness.
No matter how you look at it, someone is screwed.
posted by KirkJobSluder at 4:26 PM on February 8, 2009
A bad idea for many reasons. No thanks.
posted by blaneyphoto at 4:26 PM on February 8, 2009
posted by blaneyphoto at 4:26 PM on February 8, 2009
Yes, tybeet the cost of university definitely acts as a barrier because people fear the loans, plus people can't always get enough loans. If you send more people to school, you create economic activity, free up more jobs for other people, avoid depressing wages scales, etc. I'm afraid there simply is no comparison between the beneficial effects of paying for more education vs. forgiving debts.
posted by jeffburdges at 4:29 PM on February 8, 2009
posted by jeffburdges at 4:29 PM on February 8, 2009
Um... Science!... we're not talking about people "walking away from their debts" - we're talking about the government forgiving them.
How, again, is this an insult to the taxpayer - particularly compared with the bailout?
I note you didn't comment on the Republicanism...
Some people feel an obligation to repay personal debts. Even if it means going hungry. Or without heat. Even if it means walking to work. Or having a tooth pulled rather than filled. Some have a diffrent work ethic. I don't think it's related to partisian politics. some just love to really own what they have..
posted by dawson at 4:34 PM on February 8, 2009
How, again, is this an insult to the taxpayer - particularly compared with the bailout?
I note you didn't comment on the Republicanism...
Some people feel an obligation to repay personal debts. Even if it means going hungry. Or without heat. Even if it means walking to work. Or having a tooth pulled rather than filled. Some have a diffrent work ethic. I don't think it's related to partisian politics. some just love to really own what they have..
posted by dawson at 4:34 PM on February 8, 2009
In America, when responsible make mistakes, responsible people bear the burden. When irresponsible people make mistakes, responsible people bear the burden. This is true because all politicians are crooks. Welcome to America.
posted by milarepa at 4:37 PM on February 8, 2009 [2 favorites]
posted by milarepa at 4:37 PM on February 8, 2009 [2 favorites]
2. give it to a very large number of poor or middle-class people who worked hard to get an education and paid an astonishingly great cost for it that they wouldn't pay in any other Western state.
lupus_yonderboy: Apologies if this has been addressed, but, as someone still paying their student loans more than 10 years after I finished university, I think Canadians pay a lot for their schooling too.
posted by stinkycheese at 4:37 PM on February 8, 2009
lupus_yonderboy: Apologies if this has been addressed, but, as someone still paying their student loans more than 10 years after I finished university, I think Canadians pay a lot for their schooling too.
posted by stinkycheese at 4:37 PM on February 8, 2009
The people screaming against student loan forgiveness may have their reasons, but most of what I see from them in this thread is sneering resentment.
posted by Pope Guilty at 4:52 PM on February 8, 2009 [8 favorites]
posted by Pope Guilty at 4:52 PM on February 8, 2009 [8 favorites]
Some people feel an obligation to repay personal debts. Even if it means going hungry. Or without heat. Even if it means walking to work. Or having a tooth pulled rather than filled.
And people who aren't filth think that the choice shouldn't be inflicted upon people.
posted by Pope Guilty at 4:53 PM on February 8, 2009 [3 favorites]
And people who aren't filth think that the choice shouldn't be inflicted upon people.
posted by Pope Guilty at 4:53 PM on February 8, 2009 [3 favorites]
Why don't they forgive my IRS debt? I'd go out and spend that shit immediately.
posted by Astro Zombie at 4:54 PM on February 8, 2009
posted by Astro Zombie at 4:54 PM on February 8, 2009
dawson: Some people feel an obligation to repay personal debts. Even if it means going hungry. Or without heat. Even if it means walking to work. Or having a tooth pulled rather than filled. Some have a diffrent work ethic. I don't think it's related to partisian politics. some just love to really own what they have..
Well you know, I don't see anyone seriously arguing for reigning on that obligation.
But from my perspective, providing basic shelter, food, and health care does and should trump any other priority. At the very least because the long-term costs on everyone involved of not prioritizing basic needs are disastrous.
milarepa: In America, when responsible make mistakes, responsible people bear the burden. When irresponsible people make mistakes, responsible people bear the burden. This is true because all politicians are crooks. Welcome to America.
There was a recent TAL episode that focused on interviews made by a radio newsman who recently died, so there was about a half-hour of conversations with survivors of the great depression. And one of the themes that stuck out common among all but the most privileged, was how they felt personal shame and responsibility over economic problems that were essentially out of their control.
Hello? It's a fucking recession and very responsible people are having trouble finding jobs, or loosing their jobs because companies are making across-the-board cuts in personnel. And most of the people I know who would appreciate a little relief want it because they are responsibly trying to make limited means stretch across multiple responsibilities.
posted by KirkJobSluder at 4:58 PM on February 8, 2009
Well you know, I don't see anyone seriously arguing for reigning on that obligation.
But from my perspective, providing basic shelter, food, and health care does and should trump any other priority. At the very least because the long-term costs on everyone involved of not prioritizing basic needs are disastrous.
milarepa: In America, when responsible make mistakes, responsible people bear the burden. When irresponsible people make mistakes, responsible people bear the burden. This is true because all politicians are crooks. Welcome to America.
There was a recent TAL episode that focused on interviews made by a radio newsman who recently died, so there was about a half-hour of conversations with survivors of the great depression. And one of the themes that stuck out common among all but the most privileged, was how they felt personal shame and responsibility over economic problems that were essentially out of their control.
Hello? It's a fucking recession and very responsible people are having trouble finding jobs, or loosing their jobs because companies are making across-the-board cuts in personnel. And most of the people I know who would appreciate a little relief want it because they are responsibly trying to make limited means stretch across multiple responsibilities.
posted by KirkJobSluder at 4:58 PM on February 8, 2009
How about we forgive everyone's donation to NPR and Fleet Foxes CD purchases too?
I think one side of the aisle trying to throw free money at those who need it least is enough, thanks.
posted by drjimmy11 at 4:58 PM on February 8, 2009
I think one side of the aisle trying to throw free money at those who need it least is enough, thanks.
posted by drjimmy11 at 4:58 PM on February 8, 2009
I think that people are already becoming angry at the situation and the consequenceless environment that has led to it. I think that a program like this will likely make people angrier.
Additionally, if one is somehow hoping that free market forces will help keep costs in bounds, then making education seem less expensive will not help apply any more pressure to universities to keep tuition costs down. What are universities spending their budgets on? I think a lot of it is spent in order that they keep up with each other in terms of sports facilities and huge salaries to the very best professors, so that they can attract enough rich students and donors.
Universities view undergrads as a major source of money. Since, even as costs rise, undergrads keep applying in larger and larger numbers, there's very little incentive to keep costs down. I realize that university administrators have a definite, heartfelt, yet vague sense of mission and ethics, but they usually end up having to defer to "bottom line" managers, who say "Oh, no, we can't sacrifice the stadium, sports boxes are a major source of revenue", or "We have to retain our top faculty; if they get lured away by ivy league schools, we'll no longer seem to be nearly as prestigious".
Maybe the donations help, but really, couldn't we just teach people what they need to know, what they want to know, and not try to hold them hostage as much as possible? I realize it's a hard problem, one that civilization's been working on for many hundreds of years, but that's fine -- that's the problem we're working on now: how to give a real education to everyone, not just the rich; how to make sure that everyone in our civilization can vote knowledgeably and not be fooled by cheap tricks of a better-educated or wilier class; how to know enough to know that we can trust each other.
It's worth a lot of work and even sacrifice to achieve this; the thing is, I think a lot of people have been lulled into thinking we've achieved it already. No, we haven't. The huge student loans people carry are one awkward, imperfect symptom of how far we've come and how far we still have to go. But if we just forgive them, I think it will break the system we have. And it will make me mad, too.
My parents refused to get into debt or allow me to get into debt. I cried and my sixeen-year-old heart was broken when I realized that I wouldn't be able to attend any school that I really wanted to. My parents wouldn't even give me the $50 it would have cost to apply to MIT, because what was the point? I was just setting myself up for disappointment. Then I put myself through a school I didn't even particularly want to attend, in a major that I at least figured was flexible even if I was completely bored by it, alternating work terms with school terms. Even now, it upsets me to think about it; I could have gotten in to almost any school (and did get into the one liberal arts school to which I applied), but no way did I think I could pay for it. Maybe if I'd been more self-possessed, I could have found a way, but even then I'd have been at a disadvantage compared to less-stressed, less-paying-their-own-way students.
Now, I couldn't even apply to attend UNC-CH as an undergrad because I already have an undergrad degree that I don't particularly like. This also makes me a little mad. But I also know that this is silly, because I'm lucky to have the degree that I do have, especially given the degree to which I didn't care about my work as an undergrad; it's just where I happened to fall in the scheme of things.
And I know there are a lot of people out there who majored in things that were interesting or compelling to them, taking out loans, dealing with the consequences later; why should I subsidize their more-fun, more-fulfilling journey through academe?
So, yeah, if you add even more unfairness into the system, I and others like me will be upset.
posted by amtho at 4:59 PM on February 8, 2009 [3 favorites]
Additionally, if one is somehow hoping that free market forces will help keep costs in bounds, then making education seem less expensive will not help apply any more pressure to universities to keep tuition costs down. What are universities spending their budgets on? I think a lot of it is spent in order that they keep up with each other in terms of sports facilities and huge salaries to the very best professors, so that they can attract enough rich students and donors.
Universities view undergrads as a major source of money. Since, even as costs rise, undergrads keep applying in larger and larger numbers, there's very little incentive to keep costs down. I realize that university administrators have a definite, heartfelt, yet vague sense of mission and ethics, but they usually end up having to defer to "bottom line" managers, who say "Oh, no, we can't sacrifice the stadium, sports boxes are a major source of revenue", or "We have to retain our top faculty; if they get lured away by ivy league schools, we'll no longer seem to be nearly as prestigious".
Maybe the donations help, but really, couldn't we just teach people what they need to know, what they want to know, and not try to hold them hostage as much as possible? I realize it's a hard problem, one that civilization's been working on for many hundreds of years, but that's fine -- that's the problem we're working on now: how to give a real education to everyone, not just the rich; how to make sure that everyone in our civilization can vote knowledgeably and not be fooled by cheap tricks of a better-educated or wilier class; how to know enough to know that we can trust each other.
It's worth a lot of work and even sacrifice to achieve this; the thing is, I think a lot of people have been lulled into thinking we've achieved it already. No, we haven't. The huge student loans people carry are one awkward, imperfect symptom of how far we've come and how far we still have to go. But if we just forgive them, I think it will break the system we have. And it will make me mad, too.
My parents refused to get into debt or allow me to get into debt. I cried and my sixeen-year-old heart was broken when I realized that I wouldn't be able to attend any school that I really wanted to. My parents wouldn't even give me the $50 it would have cost to apply to MIT, because what was the point? I was just setting myself up for disappointment. Then I put myself through a school I didn't even particularly want to attend, in a major that I at least figured was flexible even if I was completely bored by it, alternating work terms with school terms. Even now, it upsets me to think about it; I could have gotten in to almost any school (and did get into the one liberal arts school to which I applied), but no way did I think I could pay for it. Maybe if I'd been more self-possessed, I could have found a way, but even then I'd have been at a disadvantage compared to less-stressed, less-paying-their-own-way students.
Now, I couldn't even apply to attend UNC-CH as an undergrad because I already have an undergrad degree that I don't particularly like. This also makes me a little mad. But I also know that this is silly, because I'm lucky to have the degree that I do have, especially given the degree to which I didn't care about my work as an undergrad; it's just where I happened to fall in the scheme of things.
And I know there are a lot of people out there who majored in things that were interesting or compelling to them, taking out loans, dealing with the consequences later; why should I subsidize their more-fun, more-fulfilling journey through academe?
So, yeah, if you add even more unfairness into the system, I and others like me will be upset.
posted by amtho at 4:59 PM on February 8, 2009 [3 favorites]
sneering resentment.
Not really. I just think in most cases they made a silly choice, paying hundreds for an education when the country is full of excellent state schools for 3 or 4 grand a year.
And this is not anything like a serious solution to anything.
posted by drjimmy11 at 5:00 PM on February 8, 2009
Not really. I just think in most cases they made a silly choice, paying hundreds for an education when the country is full of excellent state schools for 3 or 4 grand a year.
And this is not anything like a serious solution to anything.
posted by drjimmy11 at 5:00 PM on February 8, 2009
Well, I reject the notion that something must be retroactively fair given recent changes in our economic system. Furthermore, the position of student loan companies in comparison to other lenders in dealing with borrower default and hardship has been greatly privileged by law.It doesn't have to be fair, but if it's not it ought to be maximally simulative. Forgiving student loan debt would be simulative because much of it would be saved. That's why I said, to be fair, you could give people refundable tax credits. That would help people without degrees even more, and those people are likely to have even less money. A refundable tax credit means that even if you don't end up owing any taxes, you still get the credit added on to your rebate.
What I think we need now is relief for people who are getting especially screwed. Perhaps people who are currently unemployed should have their interest payments covered while unemployed, and they should get health insurance as well, at least until universal healthcare passes.
Some people feel an obligation to repay personal debts. Even if it means going hungry. Or without heat. Even if it means walking to work. Or having a tooth pulled rather than filled. Some have a diffrent work ethic. I don't think it's related to partisian politics. some just love to really own what they have..No one's saying that people should be forbidden to pay back their loans.
posted by delmoi at 5:05 PM on February 8, 2009
drjimmy11: Not really. I just think in most cases they made a silly choice, paying hundreds for an education when the country is full of excellent state schools for 3 or 4 grand a year.
My gawsh, arn't you just full of the stereotype-laden bits of wisdom this evening?
And this is not anything like a serious solution to anything.
Why not? We have legal forms of debt relief due to economic hardship for for just about any other form of debt. Hell, bankruptcy seems to be a big way of paying for the health care of the underemployed. Like it or not, we are going to have millions of responsible people unable to make their student loan obligations before we are out of the woods on this.
amtho: So, yeah, if you add even more unfairness into the system, I and others like me will be upset.
Your personal feelings make a piss-poor argument for policy.
posted by KirkJobSluder at 5:09 PM on February 8, 2009
My gawsh, arn't you just full of the stereotype-laden bits of wisdom this evening?
And this is not anything like a serious solution to anything.
Why not? We have legal forms of debt relief due to economic hardship for for just about any other form of debt. Hell, bankruptcy seems to be a big way of paying for the health care of the underemployed. Like it or not, we are going to have millions of responsible people unable to make their student loan obligations before we are out of the woods on this.
amtho: So, yeah, if you add even more unfairness into the system, I and others like me will be upset.
Your personal feelings make a piss-poor argument for policy.
posted by KirkJobSluder at 5:09 PM on February 8, 2009
delmoi: What I think we need now is relief for people who are getting especially screwed. Perhaps people who are currently unemployed should have their interest payments covered while unemployed, and they should get health insurance as well, at least until universal healthcare passes.
Yes, I agree with this. My argument is that it's much more critical that people make their monthly housing and utility payments, than make their student loan payments. In addition, I think we can make an argument that helping people make their housing payments means fewer defaults on mortgages.
posted by KirkJobSluder at 5:12 PM on February 8, 2009
Yes, I agree with this. My argument is that it's much more critical that people make their monthly housing and utility payments, than make their student loan payments. In addition, I think we can make an argument that helping people make their housing payments means fewer defaults on mortgages.
posted by KirkJobSluder at 5:12 PM on February 8, 2009
People, individuals, need to work together in a good-faith way to make the economy, and the country, work. I don't think that relying only on people's economic self-interest will give a good result, in terms of a world we will all want to live in. We need to want to help not only ourselves, but each other.
If you accept the above, then people's feelings become extremely important.
For example, why would anyone want to run for public office, or volunteer to help with the election process? It's a painful, vulnerable position to put oneself in. Unless you a) expect to get rich from bribes, or lobbying, or some other use of power, or b) genuinely want to make the world a better place.
posted by amtho at 5:16 PM on February 8, 2009
If you accept the above, then people's feelings become extremely important.
For example, why would anyone want to run for public office, or volunteer to help with the election process? It's a painful, vulnerable position to put oneself in. Unless you a) expect to get rich from bribes, or lobbying, or some other use of power, or b) genuinely want to make the world a better place.
posted by amtho at 5:16 PM on February 8, 2009
I think the bad idea, the setting a bad precedent, is not so much about bailing out the banks. We know that's fucked up. What's worse is instilling in people, fresh out of university, fresh off of, most likely, the assumption of the first real financial burden in their lives, and saying, hey, you know that crushing debt you chose to assume in order to get what you wanted? No worries!
It would instill the idea that, hey, these things can be taken care of by a higher power. It would reduce the concept of fiscal responsibility that we've already seen take such a hit (people with crushing credit card debt who also happen to have game consoles, expensive cable bills, play online games requiring monthly membership fees, and so on, feel free to tell me why that's a good idea), and, to some extent, end us up in the mess we're in. People whose loans are forgiven will have learned a lesson: the choices you make, and the hardships you embrace, hey, they can all be wiped away, so why not choose other things just as expensive. Why not buy that house you probably can't afford.
Paying back your loans is part of becoming an adult, of taking responsibilities for your actions. I worked my ass off to pay them back, and I knew going into university that it would be me paying them back. And yeah, I went to a school that was willing to give me a lot of aid over schools that were better, but wouldn't give me a dime. I'm not against this as a "where was it when I needed it" thing, I'm against this because everyone who gets their debt forgiven will never have to accept responsibility for their actions, will never have to accept the fact that taken thousands, or tens of thousands of dollars in loans actually has consequences.
To me, the solution isn't forgiving debt, it's changing the cost of education. Brits pay a fraction of what we pay. In Germany (maybe this has changed) post-graduate degrees are free, or heavily subsidised. Like health care, we pay more for education than just about anyone, anywhere, and I'm not so sure we get the best return for our money. Trade schools in particular should be nearly free, and practical degrees as well. It is in the interest of society to have citizens with skills, rather than citizens without.
posted by Ghidorah at 5:20 PM on February 8, 2009 [3 favorites]
It would instill the idea that, hey, these things can be taken care of by a higher power. It would reduce the concept of fiscal responsibility that we've already seen take such a hit (people with crushing credit card debt who also happen to have game consoles, expensive cable bills, play online games requiring monthly membership fees, and so on, feel free to tell me why that's a good idea), and, to some extent, end us up in the mess we're in. People whose loans are forgiven will have learned a lesson: the choices you make, and the hardships you embrace, hey, they can all be wiped away, so why not choose other things just as expensive. Why not buy that house you probably can't afford.
Paying back your loans is part of becoming an adult, of taking responsibilities for your actions. I worked my ass off to pay them back, and I knew going into university that it would be me paying them back. And yeah, I went to a school that was willing to give me a lot of aid over schools that were better, but wouldn't give me a dime. I'm not against this as a "where was it when I needed it" thing, I'm against this because everyone who gets their debt forgiven will never have to accept responsibility for their actions, will never have to accept the fact that taken thousands, or tens of thousands of dollars in loans actually has consequences.
To me, the solution isn't forgiving debt, it's changing the cost of education. Brits pay a fraction of what we pay. In Germany (maybe this has changed) post-graduate degrees are free, or heavily subsidised. Like health care, we pay more for education than just about anyone, anywhere, and I'm not so sure we get the best return for our money. Trade schools in particular should be nearly free, and practical degrees as well. It is in the interest of society to have citizens with skills, rather than citizens without.
posted by Ghidorah at 5:20 PM on February 8, 2009 [3 favorites]
And most of the people I know who would appreciate a little relief want it because they are responsibly trying to make limited means stretch across multiple responsibilities.
I'm not sure who is saying that the government shouldn't provide relief, it just seems like forgiving student loans is a bad way to do it.
Let's say tomorrow we wipe out all student loan debt. Okay. Now everyone that had monthly student loan payments have no payments. So for all the folks that are unemployed, including the former students, how many jobs have been created? The unemployed remain unemployed and... now what?
The government deferring student loans for some period of time sounds like a good idea Blood, stone, etc. But forgiving current debt doesn't solve any problem other than giving money to the financial institutions that hold the loans. It doesn't create jobs and it doesn't address the underlying issues of high cost of education and usurious private loans.
posted by ryoshu at 5:23 PM on February 8, 2009
I'm not sure who is saying that the government shouldn't provide relief, it just seems like forgiving student loans is a bad way to do it.
Let's say tomorrow we wipe out all student loan debt. Okay. Now everyone that had monthly student loan payments have no payments. So for all the folks that are unemployed, including the former students, how many jobs have been created? The unemployed remain unemployed and... now what?
The government deferring student loans for some period of time sounds like a good idea Blood, stone, etc. But forgiving current debt doesn't solve any problem other than giving money to the financial institutions that hold the loans. It doesn't create jobs and it doesn't address the underlying issues of high cost of education and usurious private loans.
posted by ryoshu at 5:23 PM on February 8, 2009
And of course for good Highschool students, tuition at a state school really will be mostly free.
posted by delmoi at 5:24 PM on February 8, 2009
posted by delmoi at 5:24 PM on February 8, 2009
Not really. I just think in most cases they made a silly choice, paying hundreds for an education when the country is full of excellent state schools for 3 or 4 grand a year.
Really? 3 or 4 grand a year?? Where would that be? Not in my state, that's for sure. Look, I"m not fond of the idea of forgiving debt but rather like the idea of making college cheaper, and providing more alternative training to those who don't want a bachelor's but rather a vocation. But the idea that forgiving debts makes its supporters elitists is foolish; so is the idea that this would make grads deadbeats. If it's good enough for bankers, it's good enough for our kids--which is not a reason to do it but a reason to not insult the idea of at least discussing it.
posted by etaoin at 5:28 PM on February 8, 2009 [4 favorites]
Really? 3 or 4 grand a year?? Where would that be? Not in my state, that's for sure. Look, I"m not fond of the idea of forgiving debt but rather like the idea of making college cheaper, and providing more alternative training to those who don't want a bachelor's but rather a vocation. But the idea that forgiving debts makes its supporters elitists is foolish; so is the idea that this would make grads deadbeats. If it's good enough for bankers, it's good enough for our kids--which is not a reason to do it but a reason to not insult the idea of at least discussing it.
posted by etaoin at 5:28 PM on February 8, 2009 [4 favorites]
Without taking a position with this comment, the forgiveness would stimulate the economy because Student A now has money to put into the economy instead of paying it back to the Govt for his or her loan.
It is good to see that one comment remembered Gerald Ford...so many of us have forgotten him. Wonder why that is.
posted by Postroad at 5:29 PM on February 8, 2009 [1 favorite]
It is good to see that one comment remembered Gerald Ford...so many of us have forgotten him. Wonder why that is.
posted by Postroad at 5:29 PM on February 8, 2009 [1 favorite]
amtho: People, individuals, need to work together in a good-faith way to make the economy, and the country, work. I don't think that relying only on people's economic self-interest will give a good result, in terms of a world we will all want to live in. We need to want to help not only ourselves, but each other.
Except that working together in a good-faith way seems to only apply to people like you. The people struggling with student loan payments well beyond their means due to unemployment or underemployment in a fucking recession can apparently go eat cake as far as you are concerned.
Ghidorah: It would instill the idea that, hey, these things can be taken care of by a higher power. It would reduce the concept of fiscal responsibility that we've already seen take such a hit (people with crushing credit card debt who also happen to have game consoles, expensive cable bills, play online games requiring monthly membership fees, and so on, feel free to tell me why that's a good idea), and, to some extent, end us up in the mess we're in. People whose loans are forgiven will have learned a lesson: the choices you make, and the hardships you embrace, hey, they can all be wiped away, so why not choose other things just as expensive. Why not buy that house you probably can't afford.
My goodness, it's like a time warp to 1930!
ryoshu: Let's say tomorrow we wipe out all student loan debt.
Well, quite obviously the consensus here seems to be that wouldn't be the best idea. Of course the consensus here seems to be that any form of debt relief would be just rewarding the unworthy and foolish.
posted by KirkJobSluder at 5:31 PM on February 8, 2009 [3 favorites]
Except that working together in a good-faith way seems to only apply to people like you. The people struggling with student loan payments well beyond their means due to unemployment or underemployment in a fucking recession can apparently go eat cake as far as you are concerned.
Ghidorah: It would instill the idea that, hey, these things can be taken care of by a higher power. It would reduce the concept of fiscal responsibility that we've already seen take such a hit (people with crushing credit card debt who also happen to have game consoles, expensive cable bills, play online games requiring monthly membership fees, and so on, feel free to tell me why that's a good idea), and, to some extent, end us up in the mess we're in. People whose loans are forgiven will have learned a lesson: the choices you make, and the hardships you embrace, hey, they can all be wiped away, so why not choose other things just as expensive. Why not buy that house you probably can't afford.
My goodness, it's like a time warp to 1930!
ryoshu: Let's say tomorrow we wipe out all student loan debt.
Well, quite obviously the consensus here seems to be that wouldn't be the best idea. Of course the consensus here seems to be that any form of debt relief would be just rewarding the unworthy and foolish.
posted by KirkJobSluder at 5:31 PM on February 8, 2009 [3 favorites]
Fuck this noise. I couldn't afford to go to school, so I never went. Now they want to give a free ride to everyone who couldn't afford to go to school but went anyways? Hell no.
posted by starscream at 5:32 PM on February 8, 2009
posted by starscream at 5:32 PM on February 8, 2009
"A Bachelor's degree earns you about $30,000 more than a High School graduate makes per year. If you were smart enough to be admitted to college you were smart enough calculate, or find out how to calculate interest."
That's bullshit.
...
posted by the christopher hundreds at 6:16 PM on February 8 [2 favorites +] [!]
Sorry but your linked article does nothing to refute my statement. Perhaps you could help me with this.
Here, from your own link:
"Most will struggle for more than a decade to work it off, assuming relatively low 6.8% interest rates, the Project on Student Debt says."
And then of the remaining earning years? No benefit?
posted by vapidave at 5:33 PM on February 8, 2009
That's bullshit.
...
posted by the christopher hundreds at 6:16 PM on February 8 [2 favorites +] [!]
Sorry but your linked article does nothing to refute my statement. Perhaps you could help me with this.
Here, from your own link:
"Most will struggle for more than a decade to work it off, assuming relatively low 6.8% interest rates, the Project on Student Debt says."
And then of the remaining earning years? No benefit?
posted by vapidave at 5:33 PM on February 8, 2009
Some people feel an obligation to repay personal debts.
I very much do myself but how exactly is that a reason that the government's forgiving student loan debt is bad?
posted by lupus_yonderboy at 5:36 PM on February 8, 2009
I very much do myself but how exactly is that a reason that the government's forgiving student loan debt is bad?
posted by lupus_yonderboy at 5:36 PM on February 8, 2009
Definitely extend some sort of provisional assistance to people hit by the recession... but I don't think forgiveness is the answer, as it won't really do a thing to stimulate the economy. We need jobs, not a cash infusion. It's kind of a separate issue, really.
But just as unemployment benefits have been extended due to factors out of people's control, so should deferment & forbearance programs for student loans be extended, or even some sort of new program... a consolidation effort on the part of the Department of Education could allow people to repay loans with terms that no private corporation could offer, like 2% interest for 30 years or whatever. Right now, hardly anyone in the student loan industry is consolidating, because they cannot originate loans due to frozen capital markets. So the government could step in where no one else can (or is willing to). I think something similar could prevent people from defaulting on their mortgages and losing their homes as well. Didn't FDR implement something like this for home owners?
Anyway, I doubt we will see any such programs put in place. I continue to get the sinking feeling that our representatives in the legislature are just plain... dumb. They don't get it. I think someone expressed that sentiment more eloquently upthread, but I'll say it again. They're fucking doofuses. They won't help those who are hurting. They won't create jobs.
posted by synaesthetichaze at 5:36 PM on February 8, 2009 [1 favorite]
But just as unemployment benefits have been extended due to factors out of people's control, so should deferment & forbearance programs for student loans be extended, or even some sort of new program... a consolidation effort on the part of the Department of Education could allow people to repay loans with terms that no private corporation could offer, like 2% interest for 30 years or whatever. Right now, hardly anyone in the student loan industry is consolidating, because they cannot originate loans due to frozen capital markets. So the government could step in where no one else can (or is willing to). I think something similar could prevent people from defaulting on their mortgages and losing their homes as well. Didn't FDR implement something like this for home owners?
Anyway, I doubt we will see any such programs put in place. I continue to get the sinking feeling that our representatives in the legislature are just plain... dumb. They don't get it. I think someone expressed that sentiment more eloquently upthread, but I'll say it again. They're fucking doofuses. They won't help those who are hurting. They won't create jobs.
posted by synaesthetichaze at 5:36 PM on February 8, 2009 [1 favorite]
Without taking a position with this comment, the forgiveness would stimulate the economy because Student A now has money to put into the economy instead of paying it back to the Govt for his or her loan.
Assuming Student A has a job and that job is moderately secure, why would Student A spend that money rather than save it for a rainy day, considering how bad things are? I know what I would do and it wouldn't involve XBox games and beer.
posted by ryoshu at 5:37 PM on February 8, 2009
Assuming Student A has a job and that job is moderately secure, why would Student A spend that money rather than save it for a rainy day, considering how bad things are? I know what I would do and it wouldn't involve XBox games and beer.
posted by ryoshu at 5:37 PM on February 8, 2009
Well, quite obviously the consensus here
Your reading skills are impaired. I see people here on both sides of this argument.
posted by lupus_yonderboy at 5:38 PM on February 8, 2009
Your reading skills are impaired. I see people here on both sides of this argument.
posted by lupus_yonderboy at 5:38 PM on February 8, 2009
1930? You mean the idea of personal accountability is just totally out of fashion? Wow, I feel so old. You've totally disarmed me, and what I had said before must be totally groundless.
Oh, wait. What I meant was, do you have anything meaningful to add? I thought there was a discussion going on.
posted by Ghidorah at 5:42 PM on February 8, 2009
Oh, wait. What I meant was, do you have anything meaningful to add? I thought there was a discussion going on.
posted by Ghidorah at 5:42 PM on February 8, 2009
So now I need a time machine to go back to make a decision to take out a ton of "loans" to finish school (probably with a relatively worthless English degree) instead of dropping out to go to work?
There is a real problem in this country with degree deflation, though. I think a friend told me years ago when she worked for Enterprise Rent a Car that they required a degree to work there, vacuuming cars and smiling at customers. I mean, WTF? Another friend was ousted from his position at a big telecom because, despite glowing reviews and his years of service to the company they revamped their job descriptions to require degrees, and he didn't have one. That's insanity, defined. I think it should be a requirement that HR people NOT be allowed to have a degree of any sort to prevent this sort of self-congratulatory, masturbatory "our fry cooks all have doctorates!" bullshit.
posted by maxwelton at 5:46 PM on February 8, 2009 [1 favorite]
There is a real problem in this country with degree deflation, though. I think a friend told me years ago when she worked for Enterprise Rent a Car that they required a degree to work there, vacuuming cars and smiling at customers. I mean, WTF? Another friend was ousted from his position at a big telecom because, despite glowing reviews and his years of service to the company they revamped their job descriptions to require degrees, and he didn't have one. That's insanity, defined. I think it should be a requirement that HR people NOT be allowed to have a degree of any sort to prevent this sort of self-congratulatory, masturbatory "our fry cooks all have doctorates!" bullshit.
posted by maxwelton at 5:46 PM on February 8, 2009 [1 favorite]
Really? 3 or 4 grand a year?? Where would that be? Not in my state, that's for sure.
According to your profile: CUNY and SUNY
posted by milarepa at 5:46 PM on February 8, 2009
According to your profile: CUNY and SUNY
posted by milarepa at 5:46 PM on February 8, 2009
Ghidorah: 1930? You mean the idea of personal accountability is just totally out of fashion? Wow, I feel so old. You've totally disarmed me, and what I had said before must be totally groundless.
I mean the concept that we shouldn't help mostly hard-working people struggling to make ends meet in the middle of an economic depression because it will encourage irresponsibility comes straight out of the early days of the last big depression.
Or in short, your post suggests a profound absence of a clue as to the actual values and needs of those proposing student loan relief.
posted by KirkJobSluder at 5:49 PM on February 8, 2009
I mean the concept that we shouldn't help mostly hard-working people struggling to make ends meet in the middle of an economic depression because it will encourage irresponsibility comes straight out of the early days of the last big depression.
Or in short, your post suggests a profound absence of a clue as to the actual values and needs of those proposing student loan relief.
posted by KirkJobSluder at 5:49 PM on February 8, 2009
As someone who worked his ass off to repay his student debt, I am very much against this.
posted by aliasless at 5:49 PM on February 8, 2009
posted by aliasless at 5:49 PM on February 8, 2009
I think that maybe a better option than forgiving the loans would be to make them interest free forever. Then you still have to pay back the money eventually, but the debt wouldn't keep getting bigger as you were doing it.
posted by jefeweiss at 5:53 PM on February 8, 2009 [2 favorites]
posted by jefeweiss at 5:53 PM on February 8, 2009 [2 favorites]
A sprinkle of favorites here and there, but I'll add a chorus anyway:
Moral ambiguity. Just because other people [financial industry] are "getting away with it", doesn't make it fair that you can "get away with it."
"Oh, I shouldn't have to obey traffic laws. Lots of people speed every day and they don't get caught. It's not fair".
Part of the toil of acting as the responsible party is that you have to remain responsible when your neighbor has lit up tiki torches in his front lawn and is running around with a lamp shade on his head.
You borrowed money on the terms you would pay it back. Pay it back.
posted by cavalier at 5:54 PM on February 8, 2009 [1 favorite]
Moral ambiguity. Just because other people [financial industry] are "getting away with it", doesn't make it fair that you can "get away with it."
"Oh, I shouldn't have to obey traffic laws. Lots of people speed every day and they don't get caught. It's not fair".
Part of the toil of acting as the responsible party is that you have to remain responsible when your neighbor has lit up tiki torches in his front lawn and is running around with a lamp shade on his head.
You borrowed money on the terms you would pay it back. Pay it back.
posted by cavalier at 5:54 PM on February 8, 2009 [1 favorite]
And just try to get my image of your neighbor in a lampshade out of your head. Go on.
posted by cavalier at 5:54 PM on February 8, 2009
posted by cavalier at 5:54 PM on February 8, 2009
KirkJobSluder, I'm sorry, but maybe you didn't read what I wrote, but I know exactly what it's like to have loans, to have to sacrifice to pay them back. I made choices about where I would go to university based on what I would be able to pay back after graduation, which I will argue, along with many others, was a serious decision that has had an equally serious impact on my life, because I was raised to believe that what I want isn't always what I can afford. I paid my debt back, and worked my ass off doing it, too, working full-time, as well as three to four nights a week for about four years to do it.
Is it just me, or did you miss out on one of the causes of the massive economic crisis, the one you mention, is a lack of responsibility on the part of the consumer? Or the others, upthread, who point out that creating jobs is a hell of a lot more important right now than giving people cash? I'm all for a jobs/volunteer program for debt-relief. Send the grads to do work where it's needed. Have them join the Peace Corps, or have them volunteer to renovate abandoned housing. Don't just give them a blank slate for having made choices that they should bear responsibility for.
posted by Ghidorah at 5:58 PM on February 8, 2009
Is it just me, or did you miss out on one of the causes of the massive economic crisis, the one you mention, is a lack of responsibility on the part of the consumer? Or the others, upthread, who point out that creating jobs is a hell of a lot more important right now than giving people cash? I'm all for a jobs/volunteer program for debt-relief. Send the grads to do work where it's needed. Have them join the Peace Corps, or have them volunteer to renovate abandoned housing. Don't just give them a blank slate for having made choices that they should bear responsibility for.
posted by Ghidorah at 5:58 PM on February 8, 2009
cavalier: Moral ambiguity. Just because other people [financial industry] are "getting away with it", doesn't make it fair that you can "get away with it."
Ok, why is it that student loan vendors can get away with not being brought to the bankruptcy negotiating table, unlike most other forms of debt?
posted by KirkJobSluder at 5:59 PM on February 8, 2009 [1 favorite]
Ok, why is it that student loan vendors can get away with not being brought to the bankruptcy negotiating table, unlike most other forms of debt?
posted by KirkJobSluder at 5:59 PM on February 8, 2009 [1 favorite]
And, by the way, what values do you refer to? What values are at work in the idea that a person who agreed to a loan to purchase something that they wanted suddenly doesn't want to pay back those loans? What kind of values are those? Is there a name for this code I don't want to teach my children?
posted by Ghidorah at 6:01 PM on February 8, 2009
posted by Ghidorah at 6:01 PM on February 8, 2009
Kirk, the bankruptcy thing is because the loans are partially financed by the taxpayers... FFELP loans would not exist without subsidies from the Department of Education.
posted by synaesthetichaze at 6:02 PM on February 8, 2009
posted by synaesthetichaze at 6:02 PM on February 8, 2009
Maybe it's because I come from scary bleak German Protestant stock and parents who grew up during the Great Depression, but if it weren't for the fact that, as always, the very weakest and most vulnerable people worldwide would suffer most grievously, I'd be more and more inclined to say that the best fucking thing that could happen to this nation of self-pitying pantywaist snowflakes (me included) is a big, honking, decades-long economic collapse.
posted by FelliniBlank at 6:07 PM on February 8, 2009
posted by FelliniBlank at 6:07 PM on February 8, 2009
You mean the idea of personal accountability is just totally out of fashion?
They've long ago dehumanized all accounts.
posted by Brian B. at 6:09 PM on February 8, 2009
They've long ago dehumanized all accounts.
posted by Brian B. at 6:09 PM on February 8, 2009
I love it when someone says giving people money won't help. The alternative usually suggested is to give the money to business instead, to "create jobs."
I think we've come to the point where we realize that's not happening. Businesses are afraid. They look around and see that no one has got any money. Therefore, if no one has any money, no one is going to buy their whatever it is. Based on that, why should they hire more people?
On the other hand, if you put money into people's pockets, then they are going to spend it. Sure some will save it, but that benefits businesses too, because then banks will lend it out. In the meantime businesses can do what they do best, part people from their money.
Now, a possible compromise here is to let the government create the jobs, since no one else will. Except that's not what is going to happen is it? No, they're going to award contracts out to companies who bid the lowest to get whatever project completed. Now it doesn't take an economics professor to realize that these companies bidding are not going to want to increase their costs by hiring more people unless it is absolutely necessary. And of course, when they do, it is going to be at the cheapest wage possible minus whatever hoops being a government contractor makes them jump through and then for as little time as possible.
Oh but wait, we have several mega-ass companies that are government contractors and can do most of what the government wants. So in effect, we'd be giving our money to the likes of Halliburton. Fabulous.
On the other hand, if we give people money, businesses respond to market conditions and only create jobs in response to what is a continuing increase in demand. Those jobs will stay around and more importantly these will be real jobs, not jobs created to stimulate us.
And to folks who think this is a free ride, you're just wrong.
As several people have pointed out, we're paying for all of this. Given my druthers, I wouldn't pay for crap to stimulate the economy. I'd like to see how things play out, but I don't have a choice. My government has decreed that money is getting spent, and make no mistake, it is our money that is getting spent to "help" someone. The difference is we can pay for everyone's student loans or we can pay to bail out industries that have proven incapable or unwilling to adapt and are dragging the world down with them. I know who's going to win, but oh, I wish it weren't so.
posted by BeReasonable at 6:11 PM on February 8, 2009 [5 favorites]
I think we've come to the point where we realize that's not happening. Businesses are afraid. They look around and see that no one has got any money. Therefore, if no one has any money, no one is going to buy their whatever it is. Based on that, why should they hire more people?
On the other hand, if you put money into people's pockets, then they are going to spend it. Sure some will save it, but that benefits businesses too, because then banks will lend it out. In the meantime businesses can do what they do best, part people from their money.
Now, a possible compromise here is to let the government create the jobs, since no one else will. Except that's not what is going to happen is it? No, they're going to award contracts out to companies who bid the lowest to get whatever project completed. Now it doesn't take an economics professor to realize that these companies bidding are not going to want to increase their costs by hiring more people unless it is absolutely necessary. And of course, when they do, it is going to be at the cheapest wage possible minus whatever hoops being a government contractor makes them jump through and then for as little time as possible.
Oh but wait, we have several mega-ass companies that are government contractors and can do most of what the government wants. So in effect, we'd be giving our money to the likes of Halliburton. Fabulous.
On the other hand, if we give people money, businesses respond to market conditions and only create jobs in response to what is a continuing increase in demand. Those jobs will stay around and more importantly these will be real jobs, not jobs created to stimulate us.
And to folks who think this is a free ride, you're just wrong.
As several people have pointed out, we're paying for all of this. Given my druthers, I wouldn't pay for crap to stimulate the economy. I'd like to see how things play out, but I don't have a choice. My government has decreed that money is getting spent, and make no mistake, it is our money that is getting spent to "help" someone. The difference is we can pay for everyone's student loans or we can pay to bail out industries that have proven incapable or unwilling to adapt and are dragging the world down with them. I know who's going to win, but oh, I wish it weren't so.
posted by BeReasonable at 6:11 PM on February 8, 2009 [5 favorites]
Pyramid termite is right that focusing on student loan debt throws relief to the relatively well off compared to everyone else.
So then, let's just have across the board debt relief. For all natural persons. Since, everyone has some debt, that's something everyone can get behind.
We have to think big here.
posted by wuwei at 6:13 PM on February 8, 2009
So then, let's just have across the board debt relief. For all natural persons. Since, everyone has some debt, that's something everyone can get behind.
We have to think big here.
posted by wuwei at 6:13 PM on February 8, 2009
I think it's worth keeping in mind, as the christopher hundreds pointed out up above, that massive student debt is a fairly recent phenomenon. Even those "cheap" state schools now cost thousands of dollars more each semester than they did a generation ago, whereas entry-level salaries for new grads have dropped. Students today are being expected to be "personally accountable" for a hell of a lot more debt than their parents were, for an education that isn't worth as much on the marketplace.
posted by sevenyearlurk at 6:15 PM on February 8, 2009 [2 favorites]
posted by sevenyearlurk at 6:15 PM on February 8, 2009 [2 favorites]
You borrowed money on the terms you would pay it back. Pay it back.
What the HECK is wrong with you people?
No one is suggesting that people unilaterally stop paying their loans. No one.
The "you" here making the decision is the government - not student loan holders.
Now, I'm absolutely not sure that a "stimulus package" is the right thing, nor that if there's a stimulus package that this is the right one.
But I absolutely know for sure that this is a lot better use for the money than giving it to already-rich bankers who caused this mess in the first place.
And it's absolutely clear that despite all the moral crap people are laying on student loan holders, if the government decides to forgive your loan, you are doing nothing wrong by accepting it.
Here's a question those against this idea
1. Are you in favour of the previous banker bailout, or the upcoming banker bailout, and if so, why?
2. If not, what's your suggestion for a strategy to deal with the economic collapse?
posted by lupus_yonderboy at 6:17 PM on February 8, 2009
What the HECK is wrong with you people?
No one is suggesting that people unilaterally stop paying their loans. No one.
The "you" here making the decision is the government - not student loan holders.
Now, I'm absolutely not sure that a "stimulus package" is the right thing, nor that if there's a stimulus package that this is the right one.
But I absolutely know for sure that this is a lot better use for the money than giving it to already-rich bankers who caused this mess in the first place.
And it's absolutely clear that despite all the moral crap people are laying on student loan holders, if the government decides to forgive your loan, you are doing nothing wrong by accepting it.
Here's a question those against this idea
1. Are you in favour of the previous banker bailout, or the upcoming banker bailout, and if so, why?
2. If not, what's your suggestion for a strategy to deal with the economic collapse?
posted by lupus_yonderboy at 6:17 PM on February 8, 2009
Since everyone has some debt, that's something everyone can get behind.
Don't project. I have no debts of any type.
posted by lupus_yonderboy at 6:18 PM on February 8, 2009
Don't project. I have no debts of any type.
posted by lupus_yonderboy at 6:18 PM on February 8, 2009
Sevenyearlurk:
Exactly. That's why I'm so sick of listening to baby boomers call us whiners. What a joke-- they got the low cost education and now they want to pull the ladder up behind them. So typical of the boomers.
posted by wuwei at 6:18 PM on February 8, 2009 [6 favorites]
Exactly. That's why I'm so sick of listening to baby boomers call us whiners. What a joke-- they got the low cost education and now they want to pull the ladder up behind them. So typical of the boomers.
posted by wuwei at 6:18 PM on February 8, 2009 [6 favorites]
We define 18 year olds as adults, but that's a polite legal fiction.
No, it's a legal fact. What's fictional is the widespread perception that 18-year-olds and younger teens are constitutionally incapable of making mature, responsible decisions about their lives. They did a fine job of it for millennia, still do most places, and still would in the US if we hadn't spent the last half-century relentlessly infantilizing them.
posted by FelliniBlank at 6:19 PM on February 8, 2009 [7 favorites]
No, it's a legal fact. What's fictional is the widespread perception that 18-year-olds and younger teens are constitutionally incapable of making mature, responsible decisions about their lives. They did a fine job of it for millennia, still do most places, and still would in the US if we hadn't spent the last half-century relentlessly infantilizing them.
posted by FelliniBlank at 6:19 PM on February 8, 2009 [7 favorites]
This thread doesn't exist. Why not? Because "America is a Classless Society" TM
posted by telstar at 6:22 PM on February 8, 2009
posted by telstar at 6:22 PM on February 8, 2009
and I'd add that poor tend to have little or no debt a lot of the time - because they can't get credit. My next door neighbors are incredibly poor and I'm the only one who would "loan" them money (which I don't expect to see back in this world).
Aside from that, the only person they owe is the IRS - you just know those debts aren't going to be forgiven - and from looking at their paperwork and paystubs, it appears to me that their issue is that one company deducted from their paycheck for taxes but never sent that tax money to the IRS...
posted by lupus_yonderboy at 6:22 PM on February 8, 2009
Aside from that, the only person they owe is the IRS - you just know those debts aren't going to be forgiven - and from looking at their paperwork and paystubs, it appears to me that their issue is that one company deducted from their paycheck for taxes but never sent that tax money to the IRS...
posted by lupus_yonderboy at 6:22 PM on February 8, 2009
I have $116,000 in student debt; which means I'm lucky. As an MD student from a non-tier I medical school with a partial scholarship, I avoided the huge sums of some of my colleagues, going up into the 200,000s. And yet, attendings who graduated just a few years ago borrowed seemingly far less; this being the result of 9% per year tuition increases.
At the end of my residency, I can probably expect to make around $150,000. Out of that, I'll pay total taxes of nearly 50%. Malpractice in neurology isn't too bad, but tack that on. My student loan repayments are about $900 per month for twenty-five years. My wife's will be around $700 a month if she sticks with the 10-year repayment plan and doesn't consolidate like I did. That $1600 per month, even for a six-figured earner, is fairly damaging.
Plus, I don't get to make that for another three years. I only have two years left of deferment. So at least one year it'll be trying to make the $900 per month on roughly $50,000 per year, which I'll tell you after rent, groceries, and bills in a big city, is remarkably difficult for two people.
Not that I didn't think I'd have to repay it. Not that others couldn't use debt forgiveness more. But damn, if they forgave some of that $116,000 I think I'd have an orgasm.
posted by adoarns at 6:23 PM on February 8, 2009 [3 favorites]
At the end of my residency, I can probably expect to make around $150,000. Out of that, I'll pay total taxes of nearly 50%. Malpractice in neurology isn't too bad, but tack that on. My student loan repayments are about $900 per month for twenty-five years. My wife's will be around $700 a month if she sticks with the 10-year repayment plan and doesn't consolidate like I did. That $1600 per month, even for a six-figured earner, is fairly damaging.
Plus, I don't get to make that for another three years. I only have two years left of deferment. So at least one year it'll be trying to make the $900 per month on roughly $50,000 per year, which I'll tell you after rent, groceries, and bills in a big city, is remarkably difficult for two people.
Not that I didn't think I'd have to repay it. Not that others couldn't use debt forgiveness more. But damn, if they forgave some of that $116,000 I think I'd have an orgasm.
posted by adoarns at 6:23 PM on February 8, 2009 [3 favorites]
Ghidorah: I made choices about where I would go to university based on what I would be able to pay back after graduation, which I will argue, along with many others, was a serious decision that has had an equally serious impact on my life, because I was raised to believe that what I want isn't always what I can afford. I paid my debt back, and worked my ass off doing it, too, working full-time, as well as three to four nights a week for about four years to do it.
So, tell me King Solomon, how the bloody fuck can we expect people to work a full-time job and a job on the side in a market with rising unemployment? Believe it or not, quite a few people are unable to make their student loan obligations through no moral or ethical fault of their own.
Don't just give them a blank slate for having made choices that they should bear responsibility for.
I'm wondering exactly who you are arguing with here, because I don't know anyone in this thread who has proposed a blank slate?
Specifically what I'm proposing is expanding IBR to cover all student loans, and an expansion of existing forebearance times to accommodate legitimate economic hardship.
And, by the way, what values do you refer to? What values are at work in the idea that a person who agreed to a loan to purchase something that they wanted suddenly doesn't want to pay back those loans? What kind of values are those? Is there a name for this code I don't want to teach my children?
Well, as with the Great Depression, most of the people unable to make loan obligations are hard-working and responsible people struggling to make ends meet in the face of a crashing financial system. They were the same people willing to travel across the country and accept months of separation from loved ones to make things work. They greatly appreciated the slack they were given during the hard times that enabled them to keep family homes and property.
So likewise, we are in a recession, which some people are calling a depression. Most of the people calling for debt relief on this are more than willing to pay what they can (after sensibly prioritizing things like basic shelter and food for their family) and will be willing to pay more when better times come to pass. This notion that one side of this discussion is loaded with ne'r do wells looking for a quick handout needs to go somewhere else.
posted by KirkJobSluder at 6:25 PM on February 8, 2009
So, tell me King Solomon, how the bloody fuck can we expect people to work a full-time job and a job on the side in a market with rising unemployment? Believe it or not, quite a few people are unable to make their student loan obligations through no moral or ethical fault of their own.
Don't just give them a blank slate for having made choices that they should bear responsibility for.
I'm wondering exactly who you are arguing with here, because I don't know anyone in this thread who has proposed a blank slate?
Specifically what I'm proposing is expanding IBR to cover all student loans, and an expansion of existing forebearance times to accommodate legitimate economic hardship.
And, by the way, what values do you refer to? What values are at work in the idea that a person who agreed to a loan to purchase something that they wanted suddenly doesn't want to pay back those loans? What kind of values are those? Is there a name for this code I don't want to teach my children?
Well, as with the Great Depression, most of the people unable to make loan obligations are hard-working and responsible people struggling to make ends meet in the face of a crashing financial system. They were the same people willing to travel across the country and accept months of separation from loved ones to make things work. They greatly appreciated the slack they were given during the hard times that enabled them to keep family homes and property.
So likewise, we are in a recession, which some people are calling a depression. Most of the people calling for debt relief on this are more than willing to pay what they can (after sensibly prioritizing things like basic shelter and food for their family) and will be willing to pay more when better times come to pass. This notion that one side of this discussion is loaded with ne'r do wells looking for a quick handout needs to go somewhere else.
posted by KirkJobSluder at 6:25 PM on February 8, 2009
lupus, the reason I'm against it is that it removes any notion of personal responsibility, which, from what I've seen so far, is a large reason we're in the mess we're in at the moment. Did the bankers and banks fuck everyone? Yes. Did they twist our arms, and force us to live way, way beyond our means? No, but they might have made it easier to do so. Forgiving loans that were willingly entered into, by people who, in many cases, were entering into the first legally binding contract in their lives, sets, for those people, an ugly precedent, and does absolutely nothing to return us to the kind of society that thinks living within our means is a worthwhile pursuit.
Yes, the system is fucked, and things would be much better with subsidised education with reduced tuition. Make that the primary plank, and add to it provisions for assistance with debt, and maybe I'll listen. Just forgiving debt (fostering the idea that, hey, I should go to Harvard to get a degree with an income ceiling of $30,000, rather than a state school whose tuition I could actually afford) won't help, and would probably go a long way to letting schools raise tuition even more, which would end us up right back here, yelling at each other again.
And for your questions:
1. No, and no.
2. I graduated with degrees in English and Philosophy. Do you really want me to try to fix the worldwide economic crisis? Shouldn't we look for someone a touch more qualified?
posted by Ghidorah at 6:30 PM on February 8, 2009
Yes, the system is fucked, and things would be much better with subsidised education with reduced tuition. Make that the primary plank, and add to it provisions for assistance with debt, and maybe I'll listen. Just forgiving debt (fostering the idea that, hey, I should go to Harvard to get a degree with an income ceiling of $30,000, rather than a state school whose tuition I could actually afford) won't help, and would probably go a long way to letting schools raise tuition even more, which would end us up right back here, yelling at each other again.
And for your questions:
1. No, and no.
2. I graduated with degrees in English and Philosophy. Do you really want me to try to fix the worldwide economic crisis? Shouldn't we look for someone a touch more qualified?
posted by Ghidorah at 6:30 PM on February 8, 2009
I guess what I don't get about the idea that student loan relief is elitist and classist is why, in a time when we're going to hand out massive government stimulus to keep the economy from collapsing more, it's assumed to be the only thing on the table. Just because it's the focus of this discussion doesn't mean people who think it's a good idea think it's the only idea or that all stimulus measures should be aimed at college grads.
Discussion of the merits and deficits of relief of any sort for student loan debtors does not preclude thinking other people need or deserve other forms of assistance in a major economic crisis.
posted by immlass at 6:30 PM on February 8, 2009 [1 favorite]
Discussion of the merits and deficits of relief of any sort for student loan debtors does not preclude thinking other people need or deserve other forms of assistance in a major economic crisis.
posted by immlass at 6:30 PM on February 8, 2009 [1 favorite]
Really? 3 or 4 grand a year?? Where would that be?
According to this article, the average in-state tuition at a four-year school is $6,585; here is a breakdown of the averages by state (with New York being about $800 below the fifty-state average).
Even at twice the claimed $3k, that's pretty affordable in my book. And in many states, two-year and vocational colleges have even cheaper tuition, making a technical degree that much more attainable.
However, the other side to this is that well-endowed private schools are often able to give significant need- and merit-based financial aid, unlike your local state school. So it's really depressing to so constantly hear stories like this:
My parents refused to get into debt or allow me to get into debt... My parents wouldn't even give me the $50 it would have cost to apply to MIT, because what was the point? ... Maybe if I'd been more self-possessed, I could have found a way, but even then I'd have been at a disadvantage compared to less-stressed, less-paying-their-own-way students.
So many people just look at the nominal tuition figure, without knowing that perhaps half of readthe students at the high-dollar private school are receiving serious financial aid. I'm not saying that the private schools are automatically better -- just that, surprisingly, they can be a lot cheaper in some situations.
Back to the proposal for debt relief -- I'll be honest and admit to a lot of ambivalence, just like I have about a lot of the mortgage proposals. Many of the people now in trouble with student- and house-debt got into that trouble because they gambled on house values going up and big-money jobs being available. Had they won that gamble, they would not have been volunteering to give the proceeds to their fellow taxpayers; now that they have lost, I'm less than fully convinced that it's my job to socialize their losses.
But that said, just like with the mortgage industry, student loans have boomed on bad advice, dishonest marketing, and other unpleasantries. It's pretty brutal to expect an 18 year old to make sophisticated financial decisions that will impact the rest of their life, but that's the current system.
Ideally, I'd like to see a wage-garnishing system, whereby college is free but in exchange you get 5-15% of your salary taken away to pay for it for the next ten or so years.
posted by Forktine at 6:35 PM on February 8, 2009
According to this article, the average in-state tuition at a four-year school is $6,585; here is a breakdown of the averages by state (with New York being about $800 below the fifty-state average).
Even at twice the claimed $3k, that's pretty affordable in my book. And in many states, two-year and vocational colleges have even cheaper tuition, making a technical degree that much more attainable.
However, the other side to this is that well-endowed private schools are often able to give significant need- and merit-based financial aid, unlike your local state school. So it's really depressing to so constantly hear stories like this:
My parents refused to get into debt or allow me to get into debt... My parents wouldn't even give me the $50 it would have cost to apply to MIT, because what was the point? ... Maybe if I'd been more self-possessed, I could have found a way, but even then I'd have been at a disadvantage compared to less-stressed, less-paying-their-own-way students.
So many people just look at the nominal tuition figure, without knowing that perhaps half of readthe students at the high-dollar private school are receiving serious financial aid. I'm not saying that the private schools are automatically better -- just that, surprisingly, they can be a lot cheaper in some situations.
Back to the proposal for debt relief -- I'll be honest and admit to a lot of ambivalence, just like I have about a lot of the mortgage proposals. Many of the people now in trouble with student- and house-debt got into that trouble because they gambled on house values going up and big-money jobs being available. Had they won that gamble, they would not have been volunteering to give the proceeds to their fellow taxpayers; now that they have lost, I'm less than fully convinced that it's my job to socialize their losses.
But that said, just like with the mortgage industry, student loans have boomed on bad advice, dishonest marketing, and other unpleasantries. It's pretty brutal to expect an 18 year old to make sophisticated financial decisions that will impact the rest of their life, but that's the current system.
Ideally, I'd like to see a wage-garnishing system, whereby college is free but in exchange you get 5-15% of your salary taken away to pay for it for the next ten or so years.
posted by Forktine at 6:35 PM on February 8, 2009
1. Are you in favour of the previous banker bailout, or the upcoming banker bailout, and if so, why?
No. Throwing good money after bad doesn't work. Financial institutions should be forced to open their books and account for the crap they have on them. No one wants to lend to each other because everyone knows their company has toxic assets, so everyone else must have them too. If we need to nationalize banks for the time being, fine. But throwing money down the hole does nothing.
2. If not, what's your suggestion for a strategy to deal with the economic collapse?
Assuming it's preventable? Do what I said above and have the government outlay large sums of cash to put people to work. As far as student loans go, defer them and suspend interest until the borrower can pay.
posted by ryoshu at 6:36 PM on February 8, 2009
No. Throwing good money after bad doesn't work. Financial institutions should be forced to open their books and account for the crap they have on them. No one wants to lend to each other because everyone knows their company has toxic assets, so everyone else must have them too. If we need to nationalize banks for the time being, fine. But throwing money down the hole does nothing.
2. If not, what's your suggestion for a strategy to deal with the economic collapse?
Assuming it's preventable? Do what I said above and have the government outlay large sums of cash to put people to work. As far as student loans go, defer them and suspend interest until the borrower can pay.
posted by ryoshu at 6:36 PM on February 8, 2009
Ghidorah: Just forgiving debt ...
Why are you continuing to argue against something that's not on the table?
posted by KirkJobSluder at 6:37 PM on February 8, 2009
Why are you continuing to argue against something that's not on the table?
posted by KirkJobSluder at 6:37 PM on February 8, 2009
"At the end of my residency, I can probably expect to make around $150,000. Out of that, I'll pay total taxes of nearly 50%. Malpractice in neurology isn't too bad, but tack that on. My student loan repayments are about $900 per month for twenty-five years. My wife's will be around $700 a month if she sticks with the 10-year repayment plan and doesn't consolidate like I did. That $1600 per month, even for a six-figured earner, is fairly damaging."
posted by adoarns at 8:23 PM on February 8 [+] [!]
Why do you include the debt of your spouse but not her income in your little sob story?
posted by vapidave at 6:38 PM on February 8, 2009
posted by adoarns at 8:23 PM on February 8 [+] [!]
Why do you include the debt of your spouse but not her income in your little sob story?
posted by vapidave at 6:38 PM on February 8, 2009
There are a lot of good points being raised in this discussion, but every time I see an anecdote citing "I chose where I could go to college based on what I can afford and everyone who went to an expensive school deserves to pay through their nose" smacks of sour grapes and not any kind of rational policy analysis.
Really, our higher education system needs some kind of shift so that college students don't have to make tough decisions based on who is going to give them the best financial aid package. Does that include forgiving the loans of people who have already made that choice and are paying it back? That's what's up for debate. No one is talking about giving a free ride to people who made the "bad" decision of going to an expensive school. These are people who are currently paying their loans, and they are not the ones suggesting the policy shift. It's an idea that's being tossed around in terms of "economic stimulus" and sure, maybe it's a bad idea, but if you're going to refute it the best way to do that is to come up with a logical reason why it's going to fail and not because "It's going to piss me off because I wish I had gone to xyz school, but I couldn't afford it."
Those were your choices, which no one is begrudging you. Don't begrudge someone else theirs just because they chose to accumulate debt. Clearly, the system that requires $150,000 debt for an MD needs some fixin'. This is just one idea in terms of a larger economic stimulus and "It makes me mad!" isn't a very sound rebuttal.
posted by grapefruitmoon at 6:42 PM on February 8, 2009 [2 favorites]
Really, our higher education system needs some kind of shift so that college students don't have to make tough decisions based on who is going to give them the best financial aid package. Does that include forgiving the loans of people who have already made that choice and are paying it back? That's what's up for debate. No one is talking about giving a free ride to people who made the "bad" decision of going to an expensive school. These are people who are currently paying their loans, and they are not the ones suggesting the policy shift. It's an idea that's being tossed around in terms of "economic stimulus" and sure, maybe it's a bad idea, but if you're going to refute it the best way to do that is to come up with a logical reason why it's going to fail and not because "It's going to piss me off because I wish I had gone to xyz school, but I couldn't afford it."
Those were your choices, which no one is begrudging you. Don't begrudge someone else theirs just because they chose to accumulate debt. Clearly, the system that requires $150,000 debt for an MD needs some fixin'. This is just one idea in terms of a larger economic stimulus and "It makes me mad!" isn't a very sound rebuttal.
posted by grapefruitmoon at 6:42 PM on February 8, 2009 [2 favorites]
Kirk, while I agree that it's fucked that bankruptcy doens't apply to student loans, and that the deferment of loans (where the interest is paid by the government) should be extended, I firmly don't agree that forgiving loans (which is the topic of the post) is good for the country as a whole. Our fucked up lack of fiscal responsibility has in large part contributed to this mess. Reinforcing that now will cause long-term damage.
As I said, setting up volunteer programs where people can use their skills to help rebuild, teach, or improve the city, state, or country as a whole, where people can get relief, but through actually working for it, I'm all for that.
As for people accepting hardship and distance from family? Dude, I moved to Japan to teach English to repay my loans because I knew, as lit and philosophy major from a small lib-arts college that it was my best chance to pay back my loans. I made choices, and I accepted the consequences of those actions. In no way am I Solomon, or some kind of superhero because I was able to pay back my loans. Yet I was able, by making some really hard choices, to do so. What is so twisted about taking personal responsibility to you?
posted by Ghidorah at 6:44 PM on February 8, 2009
As I said, setting up volunteer programs where people can use their skills to help rebuild, teach, or improve the city, state, or country as a whole, where people can get relief, but through actually working for it, I'm all for that.
As for people accepting hardship and distance from family? Dude, I moved to Japan to teach English to repay my loans because I knew, as lit and philosophy major from a small lib-arts college that it was my best chance to pay back my loans. I made choices, and I accepted the consequences of those actions. In no way am I Solomon, or some kind of superhero because I was able to pay back my loans. Yet I was able, by making some really hard choices, to do so. What is so twisted about taking personal responsibility to you?
posted by Ghidorah at 6:44 PM on February 8, 2009
Really? 3 or 4 grand a year?? Where would that be? Not in my state, that's for sure.
According to your profile: CUNY and SUNY
C'mon. That's a base tuition at the cheapest school in the state, before fees, books, room and board, etc. etc. You didn't specify tuition only and I'll say it again--I know of no one paying that base rate.
posted by etaoin at 6:45 PM on February 8, 2009
According to your profile: CUNY and SUNY
C'mon. That's a base tuition at the cheapest school in the state, before fees, books, room and board, etc. etc. You didn't specify tuition only and I'll say it again--I know of no one paying that base rate.
posted by etaoin at 6:45 PM on February 8, 2009
On preview, I'm arguing against the entire basis of the post. See the title?
Forgiving Student Debt Would Stimulate Economy
And grapefruitmoon, it's not sour grapes, it's questioning why people who had some kind of sense and were rational and realistic will get to subsidise the flights of fancy of people who thought that accumulating over 100,000 dollars of debt to get a degree that offers them little to no chance of being able to pay it off.
Hell, I wanted to get a degree in folklore. Seriously. Something in the back of my mind made me rethink that. A degree in folklore, and a $40,000 debt (from that school)? Instead, I got a pretty good education from a smaller school, and was able to pay off the debt.
posted by Ghidorah at 6:52 PM on February 8, 2009
Forgiving Student Debt Would Stimulate Economy
And grapefruitmoon, it's not sour grapes, it's questioning why people who had some kind of sense and were rational and realistic will get to subsidise the flights of fancy of people who thought that accumulating over 100,000 dollars of debt to get a degree that offers them little to no chance of being able to pay it off.
Hell, I wanted to get a degree in folklore. Seriously. Something in the back of my mind made me rethink that. A degree in folklore, and a $40,000 debt (from that school)? Instead, I got a pretty good education from a smaller school, and was able to pay off the debt.
posted by Ghidorah at 6:52 PM on February 8, 2009
I know that when I applied to the University of Illinois almost 10 years ago, as an honors student that ended up getting full-tuition elsewhere, they were asking over 10k for just tuition, not including housing or fees. and this was in 2000.
posted by dust.wind.dude at 6:52 PM on February 8, 2009
posted by dust.wind.dude at 6:52 PM on February 8, 2009
An interesting and somewhat painful discussion. But remember, we're talking about an idea floated by a Huffington Post blogger and a Facebook group or two. No Republicans or Democrats are going to risk the ire of voters who didn't take out student loans, or who have already paid theirs back.
This is, maybe, a fun discussion, but it's entirely fantasy at this point and it's almost inconceivable that that will change.
posted by washburn at 6:54 PM on February 8, 2009 [2 favorites]
This is, maybe, a fun discussion, but it's entirely fantasy at this point and it's almost inconceivable that that will change.
posted by washburn at 6:54 PM on February 8, 2009 [2 favorites]
According to this article, the average in-state tuition at a four-year school is $6,585; here is a breakdown of the averages by state (with New York being about $800 below the fifty-state average).
SUNY lists its tutition estimate as $4660 (though I doubt the accuracy of the estimate) but projects the costs for a year of school at more than $18,000.
I find arguments about tuition often overlook the outrageous extra costs, such as $500 textbooks. (I'm not kidding about that cost.) You can't just look at tuition anymore. While there have always been extra costs, I believe the percentage of non-tuition costs has seriously increased in recent years.
posted by etaoin at 6:57 PM on February 8, 2009
SUNY lists its tutition estimate as $4660 (though I doubt the accuracy of the estimate) but projects the costs for a year of school at more than $18,000.
I find arguments about tuition often overlook the outrageous extra costs, such as $500 textbooks. (I'm not kidding about that cost.) You can't just look at tuition anymore. While there have always been extra costs, I believe the percentage of non-tuition costs has seriously increased in recent years.
posted by etaoin at 6:57 PM on February 8, 2009
On the other hand, if you put money into people's pockets, then they are going to spend it. Sure some will save it, but that benefits businesses too, because then banks will lend it out. In the meantime businesses can do what they do best, part people from their money.
Sure, but the problem is, why should we favor one particular group? Say the average student loan payment is $500 a month. Why not just give everyone $500 a month? Obviously that's a lot of money. And actually the current stimulus is supposed to give everyone a $50/mo tax cut.
But why pick out this one particular group: college grads who paid for college with loans and haven't paid them back yet. Man imagine if someone decided to pay off their college loans with a HELOC or credit card something at a lower interest rate, they'd be doubly screwed.
A couple months ago, I had an offer from my credit card company to take a loan just 1% APR, provided I never missed a payment. I could have paid down a chunk of my student loans with that, but decided not too. If I had, I'd be kinda screwed if this went through :P. (although I couldn't borrow enough to pay all my loans)
But anyway, while I personally don't think this would be particularly stimulative of fair, I would definitely benefit personally.
posted by delmoi at 6:59 PM on February 8, 2009
Sure, but the problem is, why should we favor one particular group? Say the average student loan payment is $500 a month. Why not just give everyone $500 a month? Obviously that's a lot of money. And actually the current stimulus is supposed to give everyone a $50/mo tax cut.
But why pick out this one particular group: college grads who paid for college with loans and haven't paid them back yet. Man imagine if someone decided to pay off their college loans with a HELOC or credit card something at a lower interest rate, they'd be doubly screwed.
A couple months ago, I had an offer from my credit card company to take a loan just 1% APR, provided I never missed a payment. I could have paid down a chunk of my student loans with that, but decided not too. If I had, I'd be kinda screwed if this went through :P. (although I couldn't borrow enough to pay all my loans)
But anyway, while I personally don't think this would be particularly stimulative of fair, I would definitely benefit personally.
posted by delmoi at 6:59 PM on February 8, 2009
What is so twisted about taking personal responsibility to you?
...removes any notion of personal responsibility
Let me yet again explain that no one is suggesting that even a single individual not take personal responsibility for their actions.
If I loan you money and you don't pay me back, you're irresponsible. If I loan you money and then forgive you the loan, you are accepting my gift.
This issue has nothing, zero, zip to do with personal responsibility. The government wishes inject money into the economy to prevent economic collapse, and this is a proposed mechanism to do so that we are discussing. It might or might not be the correct way to "stimulate" the economy and that whole idea might be flawed but it has nothing whatsoever to do with personal responsibility.
posted by lupus_yonderboy at 7:01 PM on February 8, 2009 [8 favorites]
...removes any notion of personal responsibility
Let me yet again explain that no one is suggesting that even a single individual not take personal responsibility for their actions.
If I loan you money and you don't pay me back, you're irresponsible. If I loan you money and then forgive you the loan, you are accepting my gift.
This issue has nothing, zero, zip to do with personal responsibility. The government wishes inject money into the economy to prevent economic collapse, and this is a proposed mechanism to do so that we are discussing. It might or might not be the correct way to "stimulate" the economy and that whole idea might be flawed but it has nothing whatsoever to do with personal responsibility.
posted by lupus_yonderboy at 7:01 PM on February 8, 2009 [8 favorites]
Big Ten schools are part of the problem, I think. UofI, Michigan, all of them, while technically being state schools, have ridiculously high tuition, even for in-state students. They are public universities, to some extent, in name only, and very few people I knew could even think of going to them. Then again, that's why there's also Northern, Eastern, Southern, and Western Illinois State, as well as Illinois State. Then again, this means that even many public universities are only available for the financial elite, and those without the means have to settle for schools of lesser stature than their abilities warrant.
The system is screwed, and we'd be better off putting our energy into finding ways to fix the system that requires these loans.
posted by Ghidorah at 7:03 PM on February 8, 2009
The system is screwed, and we'd be better off putting our energy into finding ways to fix the system that requires these loans.
posted by Ghidorah at 7:03 PM on February 8, 2009
I can probably expect to make around $150,000. Out of that, I'll pay total taxes of nearly 50%. . . . My student loan repayments are about $900 per month for twenty-five years. My wife's will be around $700 a month if she sticks with the 10-year repayment plan and doesn't consolidate like I did.
Assuming you both make $250K per year combined, $1600/mo repayment doesn't seem out of whack given the salary gains you're getting.
With full 401K put-asides and $20K in exemptions & deductions you'll still be in the 28% marginal rate, or around $44K in income taxes.
So: 250K per year less $32K for 401K and 44K for federal income tax, $20K (8%) state, $15K FICA, $7500 Medicare gives us -- sorry, you -- $130K per year take-home. Call it $10K per month, so your loan repayments will be 16% of takehome pay. Proportional, I guess, though of course I wish the entire medical system didn't have so much pull on our wallets so you didn't have to pay so much to gain the knowledge to become a medical professional.
posted by troy at 7:04 PM on February 8, 2009 [1 favorite]
Assuming you both make $250K per year combined, $1600/mo repayment doesn't seem out of whack given the salary gains you're getting.
With full 401K put-asides and $20K in exemptions & deductions you'll still be in the 28% marginal rate, or around $44K in income taxes.
So: 250K per year less $32K for 401K and 44K for federal income tax, $20K (8%) state, $15K FICA, $7500 Medicare gives us -- sorry, you -- $130K per year take-home. Call it $10K per month, so your loan repayments will be 16% of takehome pay. Proportional, I guess, though of course I wish the entire medical system didn't have so much pull on our wallets so you didn't have to pay so much to gain the knowledge to become a medical professional.
posted by troy at 7:04 PM on February 8, 2009 [1 favorite]
Ghidorah: Our fucked up lack of fiscal responsibility has in large part contributed to this mess.
How is enabling people to pay what they can, within their means on educational loans "encouraging a lack of fiscal responsibility?"
What is so twisted about taking personal responsibility to you?
Well, no one is arguing against personal responsibility.
I'm arguing against a particular form of prejudice which says that persons unable to make certain financial commitments--and this same argument is raised for topics as diverse as health care, raising children, and home ownership--are unable to do so because of some inherent moral failing such as lack of responsibility.
Ghidorah: And grapefruitmoon, it's not sour grapes, it's questioning why people who had some kind of sense and were rational and realistic will get to subsidise the flights of fancy of people who thought that accumulating over 100,000 dollars of debt to get a degree that offers them little to no chance of being able to pay it off.
Here are the basic facts of what we are looking at for the next few years. We have a 7.2% unemployment rate and growing. This means two things, very well-qualified people are losing jobs that enabled them to make their student loan payments, and graduates of the class of '09 are going into a market with fewer jobs at the salary they expected when they entered school four years ago.
So combined, you have millions of people, who, through factors beyond their control, are going to be unable to make full student loan payments. Whether they overextended on their education or not really doesn't matter that much.
Pretty much most forms of relief that you offer for those people will take money out of the pockets of the lender.
posted by KirkJobSluder at 7:06 PM on February 8, 2009 [2 favorites]
How is enabling people to pay what they can, within their means on educational loans "encouraging a lack of fiscal responsibility?"
What is so twisted about taking personal responsibility to you?
Well, no one is arguing against personal responsibility.
I'm arguing against a particular form of prejudice which says that persons unable to make certain financial commitments--and this same argument is raised for topics as diverse as health care, raising children, and home ownership--are unable to do so because of some inherent moral failing such as lack of responsibility.
Ghidorah: And grapefruitmoon, it's not sour grapes, it's questioning why people who had some kind of sense and were rational and realistic will get to subsidise the flights of fancy of people who thought that accumulating over 100,000 dollars of debt to get a degree that offers them little to no chance of being able to pay it off.
Here are the basic facts of what we are looking at for the next few years. We have a 7.2% unemployment rate and growing. This means two things, very well-qualified people are losing jobs that enabled them to make their student loan payments, and graduates of the class of '09 are going into a market with fewer jobs at the salary they expected when they entered school four years ago.
So combined, you have millions of people, who, through factors beyond their control, are going to be unable to make full student loan payments. Whether they overextended on their education or not really doesn't matter that much.
Pretty much most forms of relief that you offer for those people will take money out of the pockets of the lender.
posted by KirkJobSluder at 7:06 PM on February 8, 2009 [2 favorites]
Exactly. That's why I'm so sick of listening to baby boomers call us whiners.
I said "whining" so I assume this is aimed at me. I'm not a boomer, I'm in my 30s. I had a fairly reasonable debt because I went to a state school, even though I could have gone to some of the top schools in the country. I didn't want to take on that debt. My wife is also "Gen X" and she went to a well respected school that ran around $20k a year for tuition back in the early 90s.
Yeah, I get it. I've been unemployed, eating rice with ketchup, trying to make rent and student loan payments while I scrape up gas money to go job hunting. Things suck out there right now, but tossing billions of dollars to forgive student loans does nothing to help the larger economic problems. If you are unemployed and paying student loans, having your debt forgiven tomorrow still means you are unemployed.
And get off my lawn.
posted by ryoshu at 7:06 PM on February 8, 2009 [1 favorite]
I said "whining" so I assume this is aimed at me. I'm not a boomer, I'm in my 30s. I had a fairly reasonable debt because I went to a state school, even though I could have gone to some of the top schools in the country. I didn't want to take on that debt. My wife is also "Gen X" and she went to a well respected school that ran around $20k a year for tuition back in the early 90s.
Yeah, I get it. I've been unemployed, eating rice with ketchup, trying to make rent and student loan payments while I scrape up gas money to go job hunting. Things suck out there right now, but tossing billions of dollars to forgive student loans does nothing to help the larger economic problems. If you are unemployed and paying student loans, having your debt forgiven tomorrow still means you are unemployed.
And get off my lawn.
posted by ryoshu at 7:06 PM on February 8, 2009 [1 favorite]
Ideally, I'd like to see a wage-garnishing system, whereby college is free but in exchange you get 5-15% of your salary taken away to pay for it for the next ten or so years.
You mean like the Income Based Repayment that will be available July 1? Or the Income Contingent plan that's available now? (Although there are 25 years, not 10).
I dunno. I'd be deliriously happy if my student loans disappeared overnight. I might even buy a house. But...I have a job now. I'm comfortable enough now. And I probably wouldn't buy more than I already do, other than a possible house.
Our cleaning lady at work? She has no education to speak of, kids and grandkids to take care of, and clears $13k a year by working two part-time jobs. Throw her some money, or put her in a jobs program, she'll buy more stuff. Oh hell yeah, she'll buy stuff.
CCC and WPA-style programs for the unemployed seem to me to be the best, and fairest, idea, but somehow I doubt that's really on the table. Pity. We got some nice stuff done last time.
posted by dilettante at 7:08 PM on February 8, 2009 [1 favorite]
You mean like the Income Based Repayment that will be available July 1? Or the Income Contingent plan that's available now? (Although there are 25 years, not 10).
I dunno. I'd be deliriously happy if my student loans disappeared overnight. I might even buy a house. But...I have a job now. I'm comfortable enough now. And I probably wouldn't buy more than I already do, other than a possible house.
Our cleaning lady at work? She has no education to speak of, kids and grandkids to take care of, and clears $13k a year by working two part-time jobs. Throw her some money, or put her in a jobs program, she'll buy more stuff. Oh hell yeah, she'll buy stuff.
CCC and WPA-style programs for the unemployed seem to me to be the best, and fairest, idea, but somehow I doubt that's really on the table. Pity. We got some nice stuff done last time.
posted by dilettante at 7:08 PM on February 8, 2009 [1 favorite]
lupus, I'm trying to say (and maybe not very clearly, though I am trying) that by forgiving these loans, we might be conditioning people to expect that Uncle Sam will be there the next time they make massive financial decisions that don't pan out. And when that happens, people will expect the same aid from the government, and if they don't get it, will be stunned.
Again, our biggest problem is spending more than we can afford. Am I saying that everyone who gets their loan forgiven will rush out and buy a mercedes? No, of course not, but I am saying that our country, and economy, long-term, will be better helped by people who have learned to live within their means. Saying "okay, you messed up, but just this once, will fix that for you" doesn't really do anything but set up the next time you've got to fix everything.
posted by Ghidorah at 7:08 PM on February 8, 2009
Again, our biggest problem is spending more than we can afford. Am I saying that everyone who gets their loan forgiven will rush out and buy a mercedes? No, of course not, but I am saying that our country, and economy, long-term, will be better helped by people who have learned to live within their means. Saying "okay, you messed up, but just this once, will fix that for you" doesn't really do anything but set up the next time you've got to fix everything.
posted by Ghidorah at 7:08 PM on February 8, 2009
Ghidorah, I almost went to Northern Illinois, and they were asking about the same 10k. Maybe it's just more expensive here in Illinois?
posted by dust.wind.dude at 7:11 PM on February 8, 2009
posted by dust.wind.dude at 7:11 PM on February 8, 2009
dust.wind.dude, honestly, I didn't know that. I'd heard that most of the 'U of' schools were more expensive. Thanks for letting me know.
posted by Ghidorah at 7:14 PM on February 8, 2009
posted by Ghidorah at 7:14 PM on February 8, 2009
C'mon. That's a base tuition at the cheapest school in the state, before fees, books, room and board, etc. etc. You didn't specify tuition only and I'll say it again--I know of no one paying that base rate.
You said it didn't occur in the state; it does. I went to CUNY. I paid the base rate. I got a good education and unlike the people I know who went to NYU, I am not being crushed by 5 figure debt.
posted by milarepa at 7:16 PM on February 8, 2009
If I loan you money and you don't pay me back, you're irresponsible. If I loan you money and then forgive you the loan, you are accepting my gift.
This issue has nothing, zero, zip to do with personal responsibility. The government wishes inject money into the economy to prevent economic collapse, and this is a proposed mechanism to do so that we are discussing. It might or might not be the correct way to "stimulate" the economy and that whole idea might be flawed but it has nothing whatsoever to do with personal responsibility.
posted by lupus_yonderboy at 9:01 PM on February 8 [1 favorite +] [!]
Something about of, by, and for comes to mind.
posted by vapidave at 7:17 PM on February 8, 2009
This issue has nothing, zero, zip to do with personal responsibility. The government wishes inject money into the economy to prevent economic collapse, and this is a proposed mechanism to do so that we are discussing. It might or might not be the correct way to "stimulate" the economy and that whole idea might be flawed but it has nothing whatsoever to do with personal responsibility.
posted by lupus_yonderboy at 9:01 PM on February 8 [1 favorite +] [!]
Something about of, by, and for comes to mind.
posted by vapidave at 7:17 PM on February 8, 2009
The bottom line is that bitching about people going $100,000 into debt for folklore degrees ran out about a year ago.
Now, the issue is how do we insure that the 7.2% and growing unemployed, and the even larger percentage of workers who are underemployed meet their fundamental necessities for shelter, food, and a reasonable level of health care.
Once those needs are met, then we can talk about their obligations with student loans and other debts.
posted by KirkJobSluder at 7:17 PM on February 8, 2009 [5 favorites]
Now, the issue is how do we insure that the 7.2% and growing unemployed, and the even larger percentage of workers who are underemployed meet their fundamental necessities for shelter, food, and a reasonable level of health care.
Once those needs are met, then we can talk about their obligations with student loans and other debts.
posted by KirkJobSluder at 7:17 PM on February 8, 2009 [5 favorites]
lupus: It might or might not be the correct way to "stimulate" the economy and that whole idea might be flawed but it has nothing whatsoever to do with personal responsibility.
Well, it does in that good old American Puritanism is still driving conversations about economics and class.
posted by KirkJobSluder at 7:21 PM on February 8, 2009 [2 favorites]
Well, it does in that good old American Puritanism is still driving conversations about economics and class.
posted by KirkJobSluder at 7:21 PM on February 8, 2009 [2 favorites]
You mean like the Income Based Repayment that will be available July 1? Or the Income Contingent plan that's available now? (Although there are 25 years, not 10)....
CCC and WPA-style programs for the unemployed seem to me to be the best, and fairest, idea, but somehow I doubt that's really on the table. Pity. We got some nice stuff done last time.
I didn't know about those new income-sensitive options -- that's great. And the first one offers (if I'm reading the article correctly) a 10-year option for people working in public service. That sounds like a pretty spectacular deal to me, honestly. Had that been available when I was graduating from college, it might have sent me down a very different path.
And I couldn't agree more about the WPA/CCC idea -- those programs produced some really spectacular art, architecture, and public works that are still being used 70 or 80 years later. Perhaps it's a measure of how good our current safety nets are (compared to how they were in the 1930s) that I suspect very, very few people would sign up for a WPA-style option if it were offered today. People simply aren't desperate enough to want to go and build trails in national forests for low wages, honestly.
posted by Forktine at 7:33 PM on February 8, 2009
CCC and WPA-style programs for the unemployed seem to me to be the best, and fairest, idea, but somehow I doubt that's really on the table. Pity. We got some nice stuff done last time.
I didn't know about those new income-sensitive options -- that's great. And the first one offers (if I'm reading the article correctly) a 10-year option for people working in public service. That sounds like a pretty spectacular deal to me, honestly. Had that been available when I was graduating from college, it might have sent me down a very different path.
And I couldn't agree more about the WPA/CCC idea -- those programs produced some really spectacular art, architecture, and public works that are still being used 70 or 80 years later. Perhaps it's a measure of how good our current safety nets are (compared to how they were in the 1930s) that I suspect very, very few people would sign up for a WPA-style option if it were offered today. People simply aren't desperate enough to want to go and build trails in national forests for low wages, honestly.
posted by Forktine at 7:33 PM on February 8, 2009
How about we forgive everyone's donation to NPR and Fleet Foxes CD purchases too?
I'm proud of my donation to NPR; I don't want it forgiven. In fact, I should probably donate again.
But back to student loans: I was lucky, because I am Canadian and lived in a large city, so I could go to university for 4 years and graduate without debt. But I did make sacrafices - one of which was having to live at home despite some serious family problems and stresses, and about 3 hours of commutting every day. I went to no parties, had few friends in my classes, and never could do any language training or study abroad because I always had to work every summer (which is hurting me in my current academic study).
So I'm torn - I'm aware that many people in debt now didn't have a choice to live at home; there was no university where they lived. But I also know that many of those with debt today had a lot of opportunities I didn't, both in their studies and in their social life at university.
But then again, American education is now stupidly expensive. So just lower the state school tuition already - make it free to good students. Don't worry about people who went to private unis - they knew what they were paying for. (So says the person registered at and working for a private uni - but there's not a chance in the world I would have gone into debt to come here. They pay me.)
posted by jb at 7:35 PM on February 8, 2009
I'm proud of my donation to NPR; I don't want it forgiven. In fact, I should probably donate again.
But back to student loans: I was lucky, because I am Canadian and lived in a large city, so I could go to university for 4 years and graduate without debt. But I did make sacrafices - one of which was having to live at home despite some serious family problems and stresses, and about 3 hours of commutting every day. I went to no parties, had few friends in my classes, and never could do any language training or study abroad because I always had to work every summer (which is hurting me in my current academic study).
So I'm torn - I'm aware that many people in debt now didn't have a choice to live at home; there was no university where they lived. But I also know that many of those with debt today had a lot of opportunities I didn't, both in their studies and in their social life at university.
But then again, American education is now stupidly expensive. So just lower the state school tuition already - make it free to good students. Don't worry about people who went to private unis - they knew what they were paying for. (So says the person registered at and working for a private uni - but there's not a chance in the world I would have gone into debt to come here. They pay me.)
posted by jb at 7:35 PM on February 8, 2009
I'm going to guess that the people here advocating debt forgiveness for school loans are at the "Esteem" level of Maslow's pyramid. And are assholes.
posted by vapidave at 7:37 PM on February 8, 2009
posted by vapidave at 7:37 PM on February 8, 2009
Oh - I should clarify. I paid all of my own tuition and books, and contributed to the family rent for the last two years.
But I don't know if what I did would be possible now or in the US - because of the rising tuition at state universities.
posted by jb at 7:45 PM on February 8, 2009
But I don't know if what I did would be possible now or in the US - because of the rising tuition at state universities.
posted by jb at 7:45 PM on February 8, 2009
Pfft, I say go for it. I'm sick of paying my stupid loans, more than half of each payment being interest. Maybe they should just cut the interest rate in half so we CAN actually pay off the loan, not just the damn interest. It's not quite fair to chastise the entire population when every school/tuition/passion is different. And lots of times, parents will take out the loan for the kid leaving the kid with the debt.
posted by ChickenringNYC at 8:14 PM on February 8, 2009
posted by ChickenringNYC at 8:14 PM on February 8, 2009
If my student loan debt were forgiven, I could perhaps buy a house. I have 10 years to go on my student loans, a Master's degree, 10 years experience and a job in my field, and I make less than $15,000 a year. This would significantly change my life.
I don't see how anyone can say this is not okay while bailout money with no strings is okay.
posted by Riverine at 8:15 PM on February 8, 2009
I don't see how anyone can say this is not okay while bailout money with no strings is okay.
posted by Riverine at 8:15 PM on February 8, 2009
Yay, I'm glad "ohplease" is winning!
posted by Curry at 8:24 PM on February 8, 2009 [2 favorites]
posted by Curry at 8:24 PM on February 8, 2009 [2 favorites]
lots of times, parents will take out the loan for the kid leaving the kid with the debt
It's not like parents are able to sign contracts that are binding on their children.
posted by oaf at 8:26 PM on February 8, 2009
It's not like parents are able to sign contracts that are binding on their children.
posted by oaf at 8:26 PM on February 8, 2009
I'm going to guess that the people here advocating debt forgiveness for school loans are at the "Esteem" level of Maslow's pyramid. And are assholes.
that's rich. what are you, on the physiological level, filling your stomach with bile via metafilter posts?
posted by Hat Maui at 8:35 PM on February 8, 2009 [3 favorites]
that's rich. what are you, on the physiological level, filling your stomach with bile via metafilter posts?
posted by Hat Maui at 8:35 PM on February 8, 2009 [3 favorites]
There aren't many contracts more binding than familial obligation.
posted by Green With You at 8:39 PM on February 8, 2009
posted by Green With You at 8:39 PM on February 8, 2009
I love how bailouts go to companies who have bankruptcy options to get their act together, yet students can default their lives straight down the toilet for getting in over their heads.
That being said, people ought to repay their debts so as not to enable unhealthy borrowing practices in others. Encouraging personal responsibility for debt probably promotes a greater good than the stimulus it would provide the economy. However, I'd have a really hard time saying no if it was offered, in light of it being the only debt that my wife and I carry, and which prevents standard of living adjustments that would be very helpful in today's economy.
As such, I have a soft place for both comments number one and two in this thread.
posted by SpacemanStix at 8:46 PM on February 8, 2009
That being said, people ought to repay their debts so as not to enable unhealthy borrowing practices in others. Encouraging personal responsibility for debt probably promotes a greater good than the stimulus it would provide the economy. However, I'd have a really hard time saying no if it was offered, in light of it being the only debt that my wife and I carry, and which prevents standard of living adjustments that would be very helpful in today's economy.
As such, I have a soft place for both comments number one and two in this thread.
posted by SpacemanStix at 8:46 PM on February 8, 2009
If my student loan debt were forgiven, I could perhaps buy a house. I have 10 years to go on my student loans, a Master's degree, 10 years experience and a job in my field, and I make less than $15,000 a year. This would significantly change my life.
...
posted by Riverine at 10:15 PM on February 8 [+] [!]
I'm left wondering what job that utilizes a Master's degree and 10 years experience, or any job for that matter, in whatever field, manages to pay you less than the federal minimum wage.
It's a lawyer you need, not debt forgiveness.
Seriously? $15,000, you have to be kidding me.
How could you afford a house with $15,000 a year annual income?
posted by vapidave at 8:53 PM on February 8, 2009 [3 favorites]
...
posted by Riverine at 10:15 PM on February 8 [+] [!]
I'm left wondering what job that utilizes a Master's degree and 10 years experience, or any job for that matter, in whatever field, manages to pay you less than the federal minimum wage.
It's a lawyer you need, not debt forgiveness.
Seriously? $15,000, you have to be kidding me.
How could you afford a house with $15,000 a year annual income?
posted by vapidave at 8:53 PM on February 8, 2009 [3 favorites]
....Man, this kind of thing always comes along AFTER I'm able to take advantage of it:
- My hometown opened up an arts magnet school AFTER I had already moved away,
- My Jr. High finally modernized itself AFTER I had already moved to the high school, and now
- student loan debt would be forgiven eight years AFTER I made my last student loan payement (at a time when I was making only $17,000 a year and had to take cash advances on my credit card to make my rent, but -- hey, I still made that student loan payment).
And yet...I think it's a good idea. I hear you all on people needing to learn to be responsible with money and yadda yadda yadda, but...there's a difference between investing in school and buying things up with your credit card. People don't have as MUCH of a choice about whether or not they "need" a college education, but they DO definitely have a choice as to whether or not they really "need" some of the stuff on their credit card.
....and I say that even after confessing that I largely used my credit card as an emergency cash machine. It was a choice, I made it, I'll pay for it, fine.
posted by EmpressCallipygos at 9:06 PM on February 8, 2009
- My hometown opened up an arts magnet school AFTER I had already moved away,
- My Jr. High finally modernized itself AFTER I had already moved to the high school, and now
- student loan debt would be forgiven eight years AFTER I made my last student loan payement (at a time when I was making only $17,000 a year and had to take cash advances on my credit card to make my rent, but -- hey, I still made that student loan payment).
And yet...I think it's a good idea. I hear you all on people needing to learn to be responsible with money and yadda yadda yadda, but...there's a difference between investing in school and buying things up with your credit card. People don't have as MUCH of a choice about whether or not they "need" a college education, but they DO definitely have a choice as to whether or not they really "need" some of the stuff on their credit card.
....and I say that even after confessing that I largely used my credit card as an emergency cash machine. It was a choice, I made it, I'll pay for it, fine.
posted by EmpressCallipygos at 9:06 PM on February 8, 2009
I'm left wondering what job that utilizes a Master's degree and 10 years experience, or any job for that matter, in whatever field, manages to pay you less than the federal minimum wage.
Ted Kaczynski?
I keed, I keed.
posted by ryoshu at 9:10 PM on February 8, 2009
Ted Kaczynski?
I keed, I keed.
posted by ryoshu at 9:10 PM on February 8, 2009
I'm going to guess that the people here advocating debt forgiveness for school loans are at the "Esteem" level of Maslow's pyramid. And are assholes.
that's rich. what are you, on the physiological level, filling your stomach with bile via metafilter posts?
posted by Hat Maui at 10:35 PM on February 8 [+] [!]
Except for the bile that I reserve for the benighted I'd put myself at the safety level. And at the not trying to invent a name associated with someone that is respected level.
Where are you? And why should I pay for your lack of intelligence?
posted by vapidave at 9:28 PM on February 8, 2009
that's rich. what are you, on the physiological level, filling your stomach with bile via metafilter posts?
posted by Hat Maui at 10:35 PM on February 8 [+] [!]
Except for the bile that I reserve for the benighted I'd put myself at the safety level. And at the not trying to invent a name associated with someone that is respected level.
Where are you? And why should I pay for your lack of intelligence?
posted by vapidave at 9:28 PM on February 8, 2009
Can anyone tell me how this isn't regressive as hell? The biggest beneficiaries are Ivy League graduates, followed far behind by state school grads. The people who truly need help beyond the level of "I could buy a few more things without my loan payments" get nothing.
posted by TungstenChef at 9:29 PM on February 8, 2009 [1 favorite]
posted by TungstenChef at 9:29 PM on February 8, 2009 [1 favorite]
I think the government should buy each post-secondary student a big screen TV.
posted by mazola at 9:30 PM on February 8, 2009 [1 favorite]
posted by mazola at 9:30 PM on February 8, 2009 [1 favorite]
I apologize for the ad hominem above. Please forgive me.
posted by vapidave at 9:40 PM on February 8, 2009 [1 favorite]
posted by vapidave at 9:40 PM on February 8, 2009 [1 favorite]
What TungstenChef said above. The most likely beneficiaries are the same people that got us into this mess in the first place. And who need it the least.
posted by vapidave at 9:44 PM on February 8, 2009
posted by vapidave at 9:44 PM on February 8, 2009
Sorry but your linked article does nothing to refute my statement. Perhaps you could help me with this.
I mistakenly linked to the second of three pages. Sorry. The first covers the alleged $25000 advantage college grads have over their high-school classmates who went straight to work. The summary: High-school only peers have 4 years of additional earnings and up to six-figures less in debt. With the average rates of income and debt, college grads are nearing 40 before seeing a return on their investment. Some get there before 40 and some never do...
The article further notes that the "extra" $25000 a year is not necessarily based on earning a college degree. The surveys don't control for things like intelligence, family background and other factors that can lead to higher incomes regardless of whether one has a sheepskin on the wall.
I think there's a further problem with these numbers because their historical nature cannot account for the fact that so many more students are opting for college than in the past. The number of great jobs for college grads is not keeping up. As others have stated, the result hasn't been better pay, but higher demands from employers for entry level jobs. Want to be a filing clerk or an administrative assistant? Where'd you get your bachelors?
posted by the christopher hundreds at 10:05 PM on February 8, 2009 [1 favorite]
I mistakenly linked to the second of three pages. Sorry. The first covers the alleged $25000 advantage college grads have over their high-school classmates who went straight to work. The summary: High-school only peers have 4 years of additional earnings and up to six-figures less in debt. With the average rates of income and debt, college grads are nearing 40 before seeing a return on their investment. Some get there before 40 and some never do...
The article further notes that the "extra" $25000 a year is not necessarily based on earning a college degree. The surveys don't control for things like intelligence, family background and other factors that can lead to higher incomes regardless of whether one has a sheepskin on the wall.
I think there's a further problem with these numbers because their historical nature cannot account for the fact that so many more students are opting for college than in the past. The number of great jobs for college grads is not keeping up. As others have stated, the result hasn't been better pay, but higher demands from employers for entry level jobs. Want to be a filing clerk or an administrative assistant? Where'd you get your bachelors?
posted by the christopher hundreds at 10:05 PM on February 8, 2009 [1 favorite]
The most likely beneficiaries are the same people that got us into this mess in the first place. And who need it the least.
And they're probably responsible for that whole mess in Vietnam, too, right? Give me a break. Most of the people who would benefit from this aren't old enough to have gotten us into this mess.
posted by the christopher hundreds at 10:09 PM on February 8, 2009
And they're probably responsible for that whole mess in Vietnam, too, right? Give me a break. Most of the people who would benefit from this aren't old enough to have gotten us into this mess.
posted by the christopher hundreds at 10:09 PM on February 8, 2009
Is this something I would have to be educated to understand?
posted by turgid dahlia at 10:13 PM on February 8, 2009
posted by turgid dahlia at 10:13 PM on February 8, 2009
Is this something I would have to be educated to understand?
Apparently not.
posted by mazola at 10:22 PM on February 8, 2009
Apparently not.
posted by mazola at 10:22 PM on February 8, 2009
What's interesting about all the anger about the economy is that it's totally unfocused. People are lashing out at each other online over policy disagreements, and beyond that large groups of people think that people with the other opinion are out of their minds or out to rob them and are just going to make things worse.
It's kind of an interesting phenomenon. If people stay mad at each other and angry at each other then nothing will change, but if people can congeal around a particular solution, then it will probably be implemented.
Obama said recently that Americans wanted "not Democratic or Republican ideas, but American ideas". But Democrats and Republicans are the only ones in power, so any solution is going to be one of those or some hybrid. Unfortunately it seems that both the republicans and democrats are out of their minds. Republicans are totally insane and democrats seem beholden to the Cult of Bipartisanship and DC insider group think psychosis.
posted by delmoi at 10:39 PM on February 8, 2009 [3 favorites]
It's kind of an interesting phenomenon. If people stay mad at each other and angry at each other then nothing will change, but if people can congeal around a particular solution, then it will probably be implemented.
Obama said recently that Americans wanted "not Democratic or Republican ideas, but American ideas". But Democrats and Republicans are the only ones in power, so any solution is going to be one of those or some hybrid. Unfortunately it seems that both the republicans and democrats are out of their minds. Republicans are totally insane and democrats seem beholden to the Cult of Bipartisanship and DC insider group think psychosis.
posted by delmoi at 10:39 PM on February 8, 2009 [3 favorites]
As others have stated, the result hasn't been better pay, but higher demands from employers for entry level jobs. Want to be a filing clerk or an administrative assistant? Where'd you get your bachelors?
For the large, failing companies. For the small businesses we look for talent first. Pedigree is a bonus? Nah. We really don't care about pedigree. Until marketing gets involved. And then when come full circle.
posted by ryoshu at 10:40 PM on February 8, 2009
For the large, failing companies. For the small businesses we look for talent first. Pedigree is a bonus? Nah. We really don't care about pedigree. Until marketing gets involved. And then when come full circle.
posted by ryoshu at 10:40 PM on February 8, 2009
I suppose this will be a polarizing issue, because I have friends with huge school debts who would applaud this. I have friends who have large credit card debts in general who would like some debt relief.
Having no school debt and having just finished paying off my credit cards after 5 plus years of payments, I would indeed feel pissed if I found out all I had to do was pay my minimum and wait--the magic fairy will sweep it all away.
posted by zardoz at 10:54 PM on February 8, 2009 [1 favorite]
Having no school debt and having just finished paying off my credit cards after 5 plus years of payments, I would indeed feel pissed if I found out all I had to do was pay my minimum and wait--the magic fairy will sweep it all away.
posted by zardoz at 10:54 PM on February 8, 2009 [1 favorite]
For all the talk about state schools, I know that the financial deal I was offered by Penn State was no better than the one I was offered by a fairly prestigious private university — in both cases, I would have had the same work-study hours and the same loans. The only difference was a better scholarship from the private school.
To this very day, I still do not understand how state schools are considered a "better deal", though I'd have to acknowledge my experience is anecdotal and therefore not representative.
I see billionaires and billionaires' sons and daughters being bailed out for their irresponsible investments. These people do nothing to benefit society but either push paper around or live off their inheritance. I see politicians bending over backwards to secure their holdings at the expense of hard-working Americans.
I worked through school, I worked after school, I paid off my student loans. I worked hard and I was a responsible person. But I would still support student loan debt forgiveness.
People who educate themselves should not be punished by rich people during a depression. People who better society by pulling themselves up and making themselves and others better, these people should not be made into chattel during tough times.
The people who give nothing back should not be rewarded. The bankers, loan sharks, politicians, parasites and other con artists should not be rewarded.
A society that places the priorities of a infinitesimally small set of the idle well-to-do over the priorities of people who give back to society, who pay back the investment placed in them many times over, is not a society that lasts very long.
While we still have any creditors left to hock our future to, America needs to decide what it prioritizes. Does it prioritize the well-off? Or does it prioritize those who will rebuild what the well-off have destroyed?
posted by Blazecock Pileon at 10:59 PM on February 8, 2009 [2 favorites]
To this very day, I still do not understand how state schools are considered a "better deal", though I'd have to acknowledge my experience is anecdotal and therefore not representative.
I see billionaires and billionaires' sons and daughters being bailed out for their irresponsible investments. These people do nothing to benefit society but either push paper around or live off their inheritance. I see politicians bending over backwards to secure their holdings at the expense of hard-working Americans.
I worked through school, I worked after school, I paid off my student loans. I worked hard and I was a responsible person. But I would still support student loan debt forgiveness.
People who educate themselves should not be punished by rich people during a depression. People who better society by pulling themselves up and making themselves and others better, these people should not be made into chattel during tough times.
The people who give nothing back should not be rewarded. The bankers, loan sharks, politicians, parasites and other con artists should not be rewarded.
A society that places the priorities of a infinitesimally small set of the idle well-to-do over the priorities of people who give back to society, who pay back the investment placed in them many times over, is not a society that lasts very long.
While we still have any creditors left to hock our future to, America needs to decide what it prioritizes. Does it prioritize the well-off? Or does it prioritize those who will rebuild what the well-off have destroyed?
posted by Blazecock Pileon at 10:59 PM on February 8, 2009 [2 favorites]
Can anyone tell me how this isn't regressive as hell? The biggest beneficiaries are Ivy League graduates, followed far behind by state school grads.
Assuming a full pardon of debt, it isn't regressive among the set of all borrowers who borrowed the limit. It's only regressive in the sense that many people didn't get the benefit of a free loan. Regardless, this concern could be avoided by simply canceling the interest on all education debt, which is really a needless surtax because the money came from the treasury for the public good, and it punishes those who can afford it least (including ivy league borrowers). This interest is redundant to the taxes paid by the borrower, which are assumed to be progressive and tax generating, which is another reason to give interest free loans without hesitation. The cost of processing the loan can be replaced by a fee.
posted by Brian B. at 11:06 PM on February 8, 2009
Assuming a full pardon of debt, it isn't regressive among the set of all borrowers who borrowed the limit. It's only regressive in the sense that many people didn't get the benefit of a free loan. Regardless, this concern could be avoided by simply canceling the interest on all education debt, which is really a needless surtax because the money came from the treasury for the public good, and it punishes those who can afford it least (including ivy league borrowers). This interest is redundant to the taxes paid by the borrower, which are assumed to be progressive and tax generating, which is another reason to give interest free loans without hesitation. The cost of processing the loan can be replaced by a fee.
posted by Brian B. at 11:06 PM on February 8, 2009
Sorry but your linked article does nothing to refute my statement. Perhaps you could help me with this.
I mistakenly linked to the second of three pages. Sorry. ...
The evidence in your linked article seems more anecdotal than is supported by my link. Further, it is unsupported by the balance.
The article further notes that the "extra" $25000 a year is not necessarily based on earning a college degree. The surveys don't control for things like intelligence, family background and other factors that can lead to higher incomes regardless of whether one has a sheepskin on the wall.
Bill Gates, Warren Buffet and Paris Hilton are outliers. Show up at your local investment bank and use moxie rather than a sheepskin and see how hard they laugh.
Want to be a filing clerk or an administrative assistant?
A lot of people would answer "yes" to that.
And they're probably responsible for that whole mess in Vietnam, too, right? Give me a break. Most of the people who would benefit from this aren't old enough to have gotten us into this mess.
Oh?
"I went to a "lesser" state school for free"
And still you whine?
posted by vapidave at 11:14 PM on February 8, 2009
I mistakenly linked to the second of three pages. Sorry. ...
The evidence in your linked article seems more anecdotal than is supported by my link. Further, it is unsupported by the balance.
The article further notes that the "extra" $25000 a year is not necessarily based on earning a college degree. The surveys don't control for things like intelligence, family background and other factors that can lead to higher incomes regardless of whether one has a sheepskin on the wall.
Bill Gates, Warren Buffet and Paris Hilton are outliers. Show up at your local investment bank and use moxie rather than a sheepskin and see how hard they laugh.
Want to be a filing clerk or an administrative assistant?
A lot of people would answer "yes" to that.
And they're probably responsible for that whole mess in Vietnam, too, right? Give me a break. Most of the people who would benefit from this aren't old enough to have gotten us into this mess.
Oh?
"I went to a "lesser" state school for free"
And still you whine?
posted by vapidave at 11:14 PM on February 8, 2009
The main argument I can see for the forgiving of student loan debt is that it would create a massive amount of entrepreneurship among young graduates not saddled with large amounts of financial obligations.
posted by clearly at 11:36 PM on February 8, 2009 [1 favorite]
posted by clearly at 11:36 PM on February 8, 2009 [1 favorite]
A lot of the complaints about this idea seem crazy to me. Why offer student loan debt relief? Here are my reasons to support this:
1) Yes, a lot of people need debt relief for credit card bills and so on. But a majority of them have credit card bills they can't pay simply because of irresponsibility - living outside their means and handling money poorly. In other words, forgiving their debt really is rewarding poor judgement. And more to the point, it's probable that many of them will simply re-up their debt the minute they're freed from past obligations. (That's why many financial advisors suggest *not* taking out home equity loans to pay off credit cards - too many people do that, and a few months later they've got home equity debt AND new credit card debt and are worse off than before.) Freeing people from student loans *won't* cause most people to run up "new" student loan debt. It will cause many people to spend more money in greater likelihood than one time "stimulus" money incentives do - and repeatedly, month after month. Forgiving student loans is, in effect, rewarding the ambition and striving to better oneself . . . especially as there was no expectation of loan forgiveness when the loans were taken.
2) It's outrageous that school costs what it does, and in many instances that it costs anything at all. This is not true in much of the world. The ability of nearly anyone to get an education in America was often touted as being representative of the opportunity here. But the wildly increasing cost of college (relative to anything else) has priced many people out of the system - and now even poor countries like Bosnia are more likely to reward those who've worked hard with a very good education at no cost. (Of course, American universities are among the very best in many areas . . . but you'd be surprised at the many areas in which they tend to be pretty poor.)
3) It's not equitable? I just don't buy that. Someone wrote: "Not exactly fair to the blue collar working classes mired in debt but not from their time at college."
I arrived in America not speaking English, with one handbag and eight Marks in my pocket. I worked hard, saved money, took out loans and had graduated from a well-known private college six years after my arrival. My loans were (and are) enormous, as you might imagine. So I have a hard time believing that, if qualified intellectually, the vast majority of blue-collar workers - with the advantages of better English than I had (for the most part) and better acclimation to American society - couldn't do the same. Some people aren't qualified or choose not to pursue a college education. That's fine. But those who go into air-conditioning repair or trucking or waitressing or whatever generally receive on-the-job training at no cost - doctors and lawyers can't do that, at least not in America. So that's not equitable either.
4) Here's a novel take on things: Those with college educations are taxed at a much, much higher rate than those with little or no high education, statistically speaking, regardless of their income!
How's that?
Well for one, the more educated a person, the fewer children he or she is likely to have. (This is a widely known statistic.) Similarly, the better educated a person is, the less likely they are to ever marry, and the more likely they are to marry later in life. (Also well-known.)
So, practically speaking, let's say I'm single and make $50,000 a year as a social worker, because I spent seven unsocial years slaving over my PhD - my choice. I managed to buy a $200,000 house, with property taxes of $3000 per year. Next door is a baker. He's married and has three kids - his choice, obviously. His house is also worth $200,000 and he pays the same property taxes as me. He also makes $50,000 a year. But he gets a lot of BONUS financial benefits. For one tax breaks for his kids and for being married. The occasional (unearned) stimulus return for his kids - what was it last year, $300 or $600 bucks per kid? The cost of 13 years of education for his kids - kindergarten through 12th grade - is paid for by the government, largely through our property taxes. Over the thirty years of my mortgage (pretending the numbers won't go up), I will pay $90,000 for the education of kids I don't have. I will receive no direct benefit. He will pay the same $90,000 as me . . . but the 39 years of school his three kids collectively get will cost the government $417,300 (according to 2007 figures for the annual cost of a student's public education) - a more than $300,000 benefit. You could also factor in things like the additional burden he and his family put on all sorts of things that aren't "expensed" by person, but by property. (For instance, parks are also taken care of via property taxes in many places. All things being equal, his family of five will use them more than I would singly.) His choice - to have three kids - got him tax breaks and other benefits. My choice - to better myself via an expensive education - got me tens of thousands of dollars in debt, despite the fact that my choice actually costs society less! (And, if I picked an education a certain way, is financially beneficial to society, since I am likely to make more and pay a lot more in taxes!)
Now, I'm not arguing against the status quo here - don't get me wrong. Maybe I'll have octuplets and the numbers will change. I understand that I also benefit from my neighbor's kids being educated nicely. Maybe my theoretical neighbor would send his kids to Catholic school and he won't benefit from the money his taxes pour into education, either. You can't really look at individual cases - there are so many variables. But my point is this - you can't talk about what's fair about some potential new deal without looking at how things are already very inequitable to many people. It's not like we live in a fair world up until today. But it might be worth a look at offering relief to people who a) cost society less per capita, b) are likely to remain that way longer, c) have the potential to make more money (thus generating taxes), and d) won't dig themselves into more debt because of this sort of relief. Forgiving student loans would do all that pretty fairly.
I could go on for pages - there are holes in this rant that I could respond to, but I probably won't - I'm just throwing it out there.
I do want to add that I know many people are in debt through little fault of their own - I'm horrified by our health system, that allows people to get so deeply in debt for healthcare offered freely even in many poor Western countries like Bulgaria, Bosnia, Romania, etc. Disasters like Katrina happen and cause financial mayhem to families - it's a disgrace these aren't dealt with better. But I think it's pretty obvious that most people who've been carrying credit card debt for a while are victims mostly of their own actions.
posted by Dee Xtrovert at 12:24 AM on February 9, 2009 [7 favorites]
1) Yes, a lot of people need debt relief for credit card bills and so on. But a majority of them have credit card bills they can't pay simply because of irresponsibility - living outside their means and handling money poorly. In other words, forgiving their debt really is rewarding poor judgement. And more to the point, it's probable that many of them will simply re-up their debt the minute they're freed from past obligations. (That's why many financial advisors suggest *not* taking out home equity loans to pay off credit cards - too many people do that, and a few months later they've got home equity debt AND new credit card debt and are worse off than before.) Freeing people from student loans *won't* cause most people to run up "new" student loan debt. It will cause many people to spend more money in greater likelihood than one time "stimulus" money incentives do - and repeatedly, month after month. Forgiving student loans is, in effect, rewarding the ambition and striving to better oneself . . . especially as there was no expectation of loan forgiveness when the loans were taken.
2) It's outrageous that school costs what it does, and in many instances that it costs anything at all. This is not true in much of the world. The ability of nearly anyone to get an education in America was often touted as being representative of the opportunity here. But the wildly increasing cost of college (relative to anything else) has priced many people out of the system - and now even poor countries like Bosnia are more likely to reward those who've worked hard with a very good education at no cost. (Of course, American universities are among the very best in many areas . . . but you'd be surprised at the many areas in which they tend to be pretty poor.)
3) It's not equitable? I just don't buy that. Someone wrote: "Not exactly fair to the blue collar working classes mired in debt but not from their time at college."
I arrived in America not speaking English, with one handbag and eight Marks in my pocket. I worked hard, saved money, took out loans and had graduated from a well-known private college six years after my arrival. My loans were (and are) enormous, as you might imagine. So I have a hard time believing that, if qualified intellectually, the vast majority of blue-collar workers - with the advantages of better English than I had (for the most part) and better acclimation to American society - couldn't do the same. Some people aren't qualified or choose not to pursue a college education. That's fine. But those who go into air-conditioning repair or trucking or waitressing or whatever generally receive on-the-job training at no cost - doctors and lawyers can't do that, at least not in America. So that's not equitable either.
4) Here's a novel take on things: Those with college educations are taxed at a much, much higher rate than those with little or no high education, statistically speaking, regardless of their income!
How's that?
Well for one, the more educated a person, the fewer children he or she is likely to have. (This is a widely known statistic.) Similarly, the better educated a person is, the less likely they are to ever marry, and the more likely they are to marry later in life. (Also well-known.)
So, practically speaking, let's say I'm single and make $50,000 a year as a social worker, because I spent seven unsocial years slaving over my PhD - my choice. I managed to buy a $200,000 house, with property taxes of $3000 per year. Next door is a baker. He's married and has three kids - his choice, obviously. His house is also worth $200,000 and he pays the same property taxes as me. He also makes $50,000 a year. But he gets a lot of BONUS financial benefits. For one tax breaks for his kids and for being married. The occasional (unearned) stimulus return for his kids - what was it last year, $300 or $600 bucks per kid? The cost of 13 years of education for his kids - kindergarten through 12th grade - is paid for by the government, largely through our property taxes. Over the thirty years of my mortgage (pretending the numbers won't go up), I will pay $90,000 for the education of kids I don't have. I will receive no direct benefit. He will pay the same $90,000 as me . . . but the 39 years of school his three kids collectively get will cost the government $417,300 (according to 2007 figures for the annual cost of a student's public education) - a more than $300,000 benefit. You could also factor in things like the additional burden he and his family put on all sorts of things that aren't "expensed" by person, but by property. (For instance, parks are also taken care of via property taxes in many places. All things being equal, his family of five will use them more than I would singly.) His choice - to have three kids - got him tax breaks and other benefits. My choice - to better myself via an expensive education - got me tens of thousands of dollars in debt, despite the fact that my choice actually costs society less! (And, if I picked an education a certain way, is financially beneficial to society, since I am likely to make more and pay a lot more in taxes!)
Now, I'm not arguing against the status quo here - don't get me wrong. Maybe I'll have octuplets and the numbers will change. I understand that I also benefit from my neighbor's kids being educated nicely. Maybe my theoretical neighbor would send his kids to Catholic school and he won't benefit from the money his taxes pour into education, either. You can't really look at individual cases - there are so many variables. But my point is this - you can't talk about what's fair about some potential new deal without looking at how things are already very inequitable to many people. It's not like we live in a fair world up until today. But it might be worth a look at offering relief to people who a) cost society less per capita, b) are likely to remain that way longer, c) have the potential to make more money (thus generating taxes), and d) won't dig themselves into more debt because of this sort of relief. Forgiving student loans would do all that pretty fairly.
I could go on for pages - there are holes in this rant that I could respond to, but I probably won't - I'm just throwing it out there.
I do want to add that I know many people are in debt through little fault of their own - I'm horrified by our health system, that allows people to get so deeply in debt for healthcare offered freely even in many poor Western countries like Bulgaria, Bosnia, Romania, etc. Disasters like Katrina happen and cause financial mayhem to families - it's a disgrace these aren't dealt with better. But I think it's pretty obvious that most people who've been carrying credit card debt for a while are victims mostly of their own actions.
posted by Dee Xtrovert at 12:24 AM on February 9, 2009 [7 favorites]
delmoi: Howard Dean had this idea back in 2004: Make student loan payment a part of the tax system, kind of like social security. You get withholding from your paycheck to pay for your education, and if you don't make enough money you wouldn't have to pay. It would reduce the risk for borrows and it would also reduce the risk for lenders, because they wouldn't have to worry about collection: Anyone who could pay would pay.
I might be missing something, but it seems like this would require some sort of tuition price controls. Since colleges would effectively be selling to a single bulk purchaser, rather than to a diverse market, where's the disincentive to jacking up their prices?
posted by kid ichorous at 2:12 AM on February 9, 2009
I might be missing something, but it seems like this would require some sort of tuition price controls. Since colleges would effectively be selling to a single bulk purchaser, rather than to a diverse market, where's the disincentive to jacking up their prices?
posted by kid ichorous at 2:12 AM on February 9, 2009
From many comments above (paraphrase):
"If my (blah blah blah) was forgiven and I had a bunch more cash I would spend it, I promise. I'd but a (house / car / new TV / whatever)."
Wow, this must be the common sacrifice and hard work that Obama was talking about. It's great to see Americans finally buckling down and struggling for the common cause.
posted by Meatbomb at 2:57 AM on February 9, 2009 [2 favorites]
"If my (blah blah blah) was forgiven and I had a bunch more cash I would spend it, I promise. I'd but a (house / car / new TV / whatever)."
Wow, this must be the common sacrifice and hard work that Obama was talking about. It's great to see Americans finally buckling down and struggling for the common cause.
posted by Meatbomb at 2:57 AM on February 9, 2009 [2 favorites]
I didn't spend ten years in college to make more money than everyone else, or even as much money. It's apparently clear that someone with the right four year degree or anyone with seven year degree is going to make more money than me at most points in their earnings career. I spent ten years in college and assumed the debt I did for control over my time and my work. My life is much, much more flexible than my higher earning peers and my work is largely self-determined. I have *time* for family, and by that I mean real, quality time. My health is good. I feel balanced. And I gave up a job making more money than I will make for another decade to do it because I didn't have these other things. So, please, please, please forgive my student loan debt, that would just make a sweet deal even sweeter. Seriously, then I really could absolutely have it all. I'd start a business or something. I'd retire early.
posted by mrmojoflying at 3:46 AM on February 9, 2009
posted by mrmojoflying at 3:46 AM on February 9, 2009
End payroll withholding and personal income taxes until things turn around?
I can't imagine a single thing which would help the Ordinary Citizen more.
posted by mikelieman at 4:00 AM on February 9, 2009 [1 favorite]
I can't imagine a single thing which would help the Ordinary Citizen more.
posted by mikelieman at 4:00 AM on February 9, 2009 [1 favorite]
I think there's a false dichotomy here over people who "made hard choices" and went to colleges they could afford and the mythical "Person with the $100,000 in debt to study Folklore." Invoking some magical person who was totally irresponsible about college debt is a filmsy attempt to ignore the real beneficiaries of such a policy: people who racked up an amount of debt that they thought they would be able to pay back - and are making payments on - but upon entering the job market, found that what they earn is in no way enough to make student loan payments on top of the other (rent, food, etc) payments that life requires.
We all subsidize each other, as DeeXtrovert magnificently pointed out. We already pay taxes for all sorts of things that we personally don't use. Saying "I don't want to fund someone else's degree in pixie dust!" is all well and good, but your taxes are already funding all kinds of crap that you don't use.
Personally, much like Maggie Gylenhaal's character in Stranger Than Fiction, I'd be happy to pay taxes for anyone else's education if I could decide not to pay the portion that goes towards military spending.
posted by grapefruitmoon at 4:09 AM on February 9, 2009 [4 favorites]
We all subsidize each other, as DeeXtrovert magnificently pointed out. We already pay taxes for all sorts of things that we personally don't use. Saying "I don't want to fund someone else's degree in pixie dust!" is all well and good, but your taxes are already funding all kinds of crap that you don't use.
Personally, much like Maggie Gylenhaal's character in Stranger Than Fiction, I'd be happy to pay taxes for anyone else's education if I could decide not to pay the portion that goes towards military spending.
posted by grapefruitmoon at 4:09 AM on February 9, 2009 [4 favorites]
Really? 3 or 4 grand a year?? Where would that be?
According to this article, the average in-state tuition at a four-year school is $6,585...
My local state university boasts a tuition of roughly $7000/yr. All fine and good. However, they define tuition as only the cost for the classes themselves. Once you add housing and other mandatory fees, their stated total cost is over $17,000/yr.
They offer scholarships. But, said scholarships apply only to the tuition part of the cost. Thus, someone getting, say, a half-ride is only getting $3,500 chopped from their bill. A good start, but still leaving a sizable chunk of change the student will have to finance.
On the other hand, we're finding that most private schools quote the total cost and apply scholarships to that larger total cost. We're finding that the monetary difference between state and private schools, insofar as the after-scholarship balance to be financed is concerned, to be very negligible. It's still an outrageous amount for a kid to have to finance, of course.
One fly in the ointment will be the amount that we will be able to finance with Federally-backed loans. FASFA is an unmitigated joke when it comes to determining a family's ability to pay. Doubly-so in the current economic climate.
Someone upstream asked when loans overtook grants as the main method of financing an education. I'd suggest it started back when congress passed credit and financing reform in the 80's, basically removing all restraints from financial firms. Then, once student loans became exempt from bankruptcy protection, that business became a free-for-all. Private student loan companies popped-up everywhere, some forging sweetheart relationships with universities (private and state) to become the school's lender-of-choice. In some worst-cases, you actually saw school financial offices driving students to private lenders over the Federal loans.
posted by Thorzdad at 4:19 AM on February 9, 2009
According to this article, the average in-state tuition at a four-year school is $6,585...
My local state university boasts a tuition of roughly $7000/yr. All fine and good. However, they define tuition as only the cost for the classes themselves. Once you add housing and other mandatory fees, their stated total cost is over $17,000/yr.
They offer scholarships. But, said scholarships apply only to the tuition part of the cost. Thus, someone getting, say, a half-ride is only getting $3,500 chopped from their bill. A good start, but still leaving a sizable chunk of change the student will have to finance.
On the other hand, we're finding that most private schools quote the total cost and apply scholarships to that larger total cost. We're finding that the monetary difference between state and private schools, insofar as the after-scholarship balance to be financed is concerned, to be very negligible. It's still an outrageous amount for a kid to have to finance, of course.
One fly in the ointment will be the amount that we will be able to finance with Federally-backed loans. FASFA is an unmitigated joke when it comes to determining a family's ability to pay. Doubly-so in the current economic climate.
Someone upstream asked when loans overtook grants as the main method of financing an education. I'd suggest it started back when congress passed credit and financing reform in the 80's, basically removing all restraints from financial firms. Then, once student loans became exempt from bankruptcy protection, that business became a free-for-all. Private student loan companies popped-up everywhere, some forging sweetheart relationships with universities (private and state) to become the school's lender-of-choice. In some worst-cases, you actually saw school financial offices driving students to private lenders over the Federal loans.
posted by Thorzdad at 4:19 AM on February 9, 2009
one way to look at debt forgiveness* in general (or a jubilee as delmoi & tgrundke mention) is from the bondholders' or 'securities' owners' perspective -- like khan mentions briefly at 5:00** (4:30 for a bit more background ;) prompted by an astute sanchez! not the dirty deed, cheeky monkeys :P um, as any veteran of capital structure tranche warfare will tell ya, as investors, (multiple) loan sharks and banksters they've _gots_ to get paid; cancellation wipes _them_ out more or less.***
so like pretty much every other kind of debt originated, securitised and distributed over the last several years, i.e. the credit bubble, your student loan has been bundled and packaged (and levered) to all get out. all those payment streams trickle down the watershed to the end 'investor' -- the wealthy, the pension fund, endowment, insurance co. -- who can then discount it up and count it as an asset... until people start defaulting, particularly en masse, in which case they go looking for a taxpayer handoutgov't bailout -- politically connected as they are -- it's recourse lending by other means. y'all are still on the hook, didja know?
---
*viz. "Forhomeowners (over-)indebted students, says Su, going through foreclosure defaulting is a great way to solve both solvency and liquidity problems overnight: your liabilities no longer exceed your assets, and your cashflow is improved by not spending a huge proportion of your income on mortgage payments.
"For the credit markets,foreclosure default neatly cuts through the Gordian knot of conflicting incentives between various tranches of 'consumer' loan or 'asset' mortgage-backed securities: 'It wipes the slate clean,' he says... 'Fortunately, mortgage loan slaves can free themselves via foreclosure default, and the masses are choosing to do so.' "
**the elusive low/middle-class bailout tantalizingly, but obliquely, mentioned on air!
***students i think are effectively 'nonrecourse'
posted by kliuless at 4:32 AM on February 9, 2009
so like pretty much every other kind of debt originated, securitised and distributed over the last several years, i.e. the credit bubble, your student loan has been bundled and packaged (and levered) to all get out. all those payment streams trickle down the watershed to the end 'investor' -- the wealthy, the pension fund, endowment, insurance co. -- who can then discount it up and count it as an asset... until people start defaulting, particularly en masse, in which case they go looking for a taxpayer handout
---
*viz. "For
"For the credit markets,
**the elusive low/middle-class bailout tantalizingly, but obliquely, mentioned on air!
***students i think are effectively 'nonrecourse'
posted by kliuless at 4:32 AM on February 9, 2009
A couple of points that I didn't see raised here which help eliminate some of the "straw man" arguments in this thread:
First, there's a difference between "lend" and "give" -- the corporate bailouts that Washington has showered around are most definitely of the "lend" variety (at negligible interest rates, no real payment terms and no small degree of risk to taxpayers.) That means there's at least a good probability that much of those will be repaid to public coffers. This "student loan forgiveness" idea is definitely of the "give" variety -- give money to the lenders (with the full interest) on behalf of the ex-students, with no repayment by the lendees. Arguments that try to equate the two scenarios -- the Wall Street bailout and the student loan forgiveness idea -- are skipping over that key difference. Equivalence would be something like the government lending a certain amount to student loan lendees at a very low interest rate, so that they can use that loan money to pay down some higher interest rate loan, and deferring the payments on this new loan to some more-financial-stable point in the future. In my personal opinion, that structure is a viable plan for all kinds of consumer debt: it is the heart of "trickle up stimulus" arguments.
Second, I've seen some fist shaking at capital gains taxes: while those are certainly used by "fat cats" as part of a strategy of minimizing their taxes, the capital gains / capital loss rules also apply to anyone with part of their retirement savings in the market (which is why we also have to have a host of other unique instruments like IRAs.) Capital gains & losses don't just apply to cash, they apply to cash value in non-cash situations (like the value of a stock portfolio changing, or a small business having loans or invoices forgiven, and a host of other situations.) So that's not as simple a knot to cut as some people might suggest without also slicing into a good chunk of the middle class.
posted by bclark at 4:33 AM on February 9, 2009
First, there's a difference between "lend" and "give" -- the corporate bailouts that Washington has showered around are most definitely of the "lend" variety (at negligible interest rates, no real payment terms and no small degree of risk to taxpayers.) That means there's at least a good probability that much of those will be repaid to public coffers. This "student loan forgiveness" idea is definitely of the "give" variety -- give money to the lenders (with the full interest) on behalf of the ex-students, with no repayment by the lendees. Arguments that try to equate the two scenarios -- the Wall Street bailout and the student loan forgiveness idea -- are skipping over that key difference. Equivalence would be something like the government lending a certain amount to student loan lendees at a very low interest rate, so that they can use that loan money to pay down some higher interest rate loan, and deferring the payments on this new loan to some more-financial-stable point in the future. In my personal opinion, that structure is a viable plan for all kinds of consumer debt: it is the heart of "trickle up stimulus" arguments.
Second, I've seen some fist shaking at capital gains taxes: while those are certainly used by "fat cats" as part of a strategy of minimizing their taxes, the capital gains / capital loss rules also apply to anyone with part of their retirement savings in the market (which is why we also have to have a host of other unique instruments like IRAs.) Capital gains & losses don't just apply to cash, they apply to cash value in non-cash situations (like the value of a stock portfolio changing, or a small business having loans or invoices forgiven, and a host of other situations.) So that's not as simple a knot to cut as some people might suggest without also slicing into a good chunk of the middle class.
posted by bclark at 4:33 AM on February 9, 2009
kid ichorous: I might be missing something, but it seems like this would require some sort of tuition price controls. Since colleges would effectively be selling to a single bulk purchaser, rather than to a diverse market, where's the disincentive to jacking up their prices?
This sounds very similar to the system New Zealand uses. We do have tuition price controls, of a sort, but I don't think they're necessary for the system to work. Our tertiary institutes charge variable fees; competition for students is their incentive to keep prices manageable. For example, the Southland Institute of Technology (polytech) charges zero fees - local government pays the fees in order to attract students to the city.
I suspect a similar policy might work in the US: university charges fees, government pays them, student repays government. Competition for students is the incentive to keep fees low, seeing as students will have to pay back eventually.
(Of course, in NZ all universities are public, so the government owns them, so the situation is somewhat different. But it might work in the US).
posted by Infinite Jest at 5:32 AM on February 9, 2009
This sounds very similar to the system New Zealand uses. We do have tuition price controls, of a sort, but I don't think they're necessary for the system to work. Our tertiary institutes charge variable fees; competition for students is their incentive to keep prices manageable. For example, the Southland Institute of Technology (polytech) charges zero fees - local government pays the fees in order to attract students to the city.
I suspect a similar policy might work in the US: university charges fees, government pays them, student repays government. Competition for students is the incentive to keep fees low, seeing as students will have to pay back eventually.
(Of course, in NZ all universities are public, so the government owns them, so the situation is somewhat different. But it might work in the US).
posted by Infinite Jest at 5:32 AM on February 9, 2009
Is there a graph out there that measures the costs of college against the rise of federal student loans over the years? It's always seemed to me that one reason college costs are so damn high is that at least since the Clinton years when he said everybody should go to college (there's a comment that made me spit out my morning coffee) and therefore he was broadening the program. Well, of course, you dedicate more money to a commodity, the price is going to go up, and if one place (cough *Harvard* cough) starts the trend, others must do likewise or risk being considered second rate. In the case of colleges I know well, the money went to higher salaries for branded professors (and non-professors, e.g. the no-show celebrity-X-in- residence programs) and student life amenities (food courts, of all things) - just to point to the most egregious.
Those of my one time classmates who actually remain in academia assure me that the costs are justified and that tuition is a fraction of needed moneys, but I'm not convinced. If anything, the rise of the e-world should be bringing the costs of higher education, of education in general, way, way down.
Anyone care to prove the above utterly pigheaded, I am interested to hear it.
posted by IndigoJones at 5:40 AM on February 9, 2009
Those of my one time classmates who actually remain in academia assure me that the costs are justified and that tuition is a fraction of needed moneys, but I'm not convinced. If anything, the rise of the e-world should be bringing the costs of higher education, of education in general, way, way down.
Anyone care to prove the above utterly pigheaded, I am interested to hear it.
posted by IndigoJones at 5:40 AM on February 9, 2009
The part of me that writes that $300 check every month for my wife's student loan, and who can see how that $300 could be the difference between us (say) fixing the broken fence, getting that brake job, me going to the dentist, etc, and not, thinks this is a great idea.
The part of me that WROTE the last check for my loans two months ago, lived in a hovel eating ramen soup and balogna sammiches while working full time to go to school, THAT part of me is sort of pissed off about it.
But that part was pissed off anyway. He's ALWAYS pissed off.
posted by dirtdirt at 5:43 AM on February 9, 2009 [4 favorites]
The part of me that WROTE the last check for my loans two months ago, lived in a hovel eating ramen soup and balogna sammiches while working full time to go to school, THAT part of me is sort of pissed off about it.
But that part was pissed off anyway. He's ALWAYS pissed off.
posted by dirtdirt at 5:43 AM on February 9, 2009 [4 favorites]
As for student debt, if they forgave some of ours, we would definitely have more money to spend.
Although, I'm still a bit sore at the bait-and-switch that I felt was pulled on me after college graduation. Home loans were pretty easily available and downpayments were not that huge, so I focused on paying down loan debt (paying extra, etc) rather than building up a bigger potential downpayment. Now the rules of the game have changed and the easy credit I had hoped for is not there.
posted by robocop is bleeding at 5:56 AM on February 9, 2009
Although, I'm still a bit sore at the bait-and-switch that I felt was pulled on me after college graduation. Home loans were pretty easily available and downpayments were not that huge, so I focused on paying down loan debt (paying extra, etc) rather than building up a bigger potential downpayment. Now the rules of the game have changed and the easy credit I had hoped for is not there.
posted by robocop is bleeding at 5:56 AM on February 9, 2009
End payroll withholding and personal income taxes until things turn around?
Which is why this country is in this problem. Everyone assumes that if you just give people more money, they'll spend it.
This is *manifestly not true* in a deflationary spiral, which is what we're dealing with today. Consumer spending is falling far faster than simple unemployment would imply, because people with jobs aren't spending. They're afraid, and rightly so, so they are trying to pay down debt and save money in case something goes wrong.
When you give them extra money, they send it to the banks -- either to pay off debt or for a rainy day. This does nothing to help consumer spending, because *this doesn't boost demand*
Thus, cutting *any* tax doesn't work, because money doesn't work. If cutting taxes did work, the economy should have gone ballistic over the last eight years. It hasn't, other than a couple of bubbles (real estate, commodities).
Forgiving debt doesn't help either. This only reduces the cost of product already acquired, and, of course, is a direct insult to those who borrowed and paid off.
There is one way to attack a deflationary spiral, and that's massive *spending*. You cannot work this from the supply side*. You need someone to spend, and there is *exactly one* organization that can spend on demand in the amount required. You have the government spend like mad, this get demand up, increased demand will find a supply to meet it, this means an increase in whatever is needed to increase that supply -- materials, labor, etc.
This is a *demand* problem. You cannot fix it with anything short of demand, and lots of it. So we need the US Government to be that source of demand until thing stabilize and the fear eases. This is what the New Deal and WWII did**. This is what we need to do now. In doing so, we could make investments that will last for decades. We could fix real problem. We could turn this country around.
And a minority of Senators are keeping it from doing just that.
Sic Transit Gloria America
* You can *never* work things from the supply side. The sheer amount of damage done over the last 25 years to the US Economy stands as tribute to that. You cannot conjure demand by increasing supply, and the mere presence of more capital doesn't automatically increase demand or supply. It will, however, eventually increase *prices*.
** The GOP is flat out lying when they say that FDR caused or amplified the great depression. The one increase in unemployment *during his term* came in 1938, after he caved in to GOP demands to cut spending. He did, and because the economy was not yet stable, unemployment increased. Spending came back in 1939 and 1940, partially because of WWII, partially because of the New Deal, and unemployment dropped and demand rose.
We then went into the *mother* of all government spending programs. The US increased spending by an order of magnitude, and increased the size of the federal payroll by an order of magintude. It ordered countless objects, sent them overseas, and didn't bring them back. (Alas, many of its employees never came back as well.) Because of this spending, unemployment was at record lows. Consumer spending, because of legal and social constraints, was at record lows as well, but more than made up for by the government's spending. Savings rates were stunning -- many households, for the first time, had two incomes, and between being in Fox Company in North Africa and the third Shift at Packard in a time of rationing, nowhere to spend that income (and, of course, it was only right that you bought War Bonds.)
So, for three years, massive demand by the government, leading to massive savings rates by the consumer. Is there any wonder that the economy boomed *after* the war?
posted by eriko at 6:11 AM on February 9, 2009 [9 favorites]
Which is why this country is in this problem. Everyone assumes that if you just give people more money, they'll spend it.
This is *manifestly not true* in a deflationary spiral, which is what we're dealing with today. Consumer spending is falling far faster than simple unemployment would imply, because people with jobs aren't spending. They're afraid, and rightly so, so they are trying to pay down debt and save money in case something goes wrong.
When you give them extra money, they send it to the banks -- either to pay off debt or for a rainy day. This does nothing to help consumer spending, because *this doesn't boost demand*
Thus, cutting *any* tax doesn't work, because money doesn't work. If cutting taxes did work, the economy should have gone ballistic over the last eight years. It hasn't, other than a couple of bubbles (real estate, commodities).
Forgiving debt doesn't help either. This only reduces the cost of product already acquired, and, of course, is a direct insult to those who borrowed and paid off.
There is one way to attack a deflationary spiral, and that's massive *spending*. You cannot work this from the supply side*. You need someone to spend, and there is *exactly one* organization that can spend on demand in the amount required. You have the government spend like mad, this get demand up, increased demand will find a supply to meet it, this means an increase in whatever is needed to increase that supply -- materials, labor, etc.
This is a *demand* problem. You cannot fix it with anything short of demand, and lots of it. So we need the US Government to be that source of demand until thing stabilize and the fear eases. This is what the New Deal and WWII did**. This is what we need to do now. In doing so, we could make investments that will last for decades. We could fix real problem. We could turn this country around.
And a minority of Senators are keeping it from doing just that.
Sic Transit Gloria America
* You can *never* work things from the supply side. The sheer amount of damage done over the last 25 years to the US Economy stands as tribute to that. You cannot conjure demand by increasing supply, and the mere presence of more capital doesn't automatically increase demand or supply. It will, however, eventually increase *prices*.
** The GOP is flat out lying when they say that FDR caused or amplified the great depression. The one increase in unemployment *during his term* came in 1938, after he caved in to GOP demands to cut spending. He did, and because the economy was not yet stable, unemployment increased. Spending came back in 1939 and 1940, partially because of WWII, partially because of the New Deal, and unemployment dropped and demand rose.
We then went into the *mother* of all government spending programs. The US increased spending by an order of magnitude, and increased the size of the federal payroll by an order of magintude. It ordered countless objects, sent them overseas, and didn't bring them back. (Alas, many of its employees never came back as well.) Because of this spending, unemployment was at record lows. Consumer spending, because of legal and social constraints, was at record lows as well, but more than made up for by the government's spending. Savings rates were stunning -- many households, for the first time, had two incomes, and between being in Fox Company in North Africa and the third Shift at Packard in a time of rationing, nowhere to spend that income (and, of course, it was only right that you bought War Bonds.)
So, for three years, massive demand by the government, leading to massive savings rates by the consumer. Is there any wonder that the economy boomed *after* the war?
posted by eriko at 6:11 AM on February 9, 2009 [9 favorites]
And still you whine?
Ah, there's your problem. You don't see the difference between whining and favoring an argument that you disagree with. Thanks for playing.
posted by the christopher hundreds at 6:12 AM on February 9, 2009 [1 favorite]
Ah, there's your problem. You don't see the difference between whining and favoring an argument that you disagree with. Thanks for playing.
posted by the christopher hundreds at 6:12 AM on February 9, 2009 [1 favorite]
Academia has considerable waste like any bureaucracy. Also, such waste migrates further & further from the universities core missing of education and research as the university expands non-core activities, like sports.
An extreme example, Rutgers University institutes faculty hiring freezes every couple years, yet embarked on a $100+M stadium expansion. A more normal university will often see other restrictions placed upon department spending, while other bureaucracy, sports, etc. all expand. A very good analogy is how the first local government employees effected by recessions are firemen and police, about the only two real services local governments provide.
I honestly think both problems arise because education & research are the primary missions of the university, and police & fire are the primary missions of local government. So people often think about those first, also when making cuts. Also, cutting core functions may win you more funding from the state, taxes, etc. than cutting some press secretary.
To solve this, your state must pass some law that distinguished between department funding and other spending, and cuts the other spending. Such a law might ideally :
1) increase or freeze funding to academic departments, chairs, etc.,
2) decrease or freeze tuition and the university's take of grants, and
3) prohibit borrowing or fundraising for any non-academic purpose.
You'd see rapid & deep cuts in associated bureaucracy
posted by jeffburdges at 6:24 AM on February 9, 2009 [1 favorite]
An extreme example, Rutgers University institutes faculty hiring freezes every couple years, yet embarked on a $100+M stadium expansion. A more normal university will often see other restrictions placed upon department spending, while other bureaucracy, sports, etc. all expand. A very good analogy is how the first local government employees effected by recessions are firemen and police, about the only two real services local governments provide.
I honestly think both problems arise because education & research are the primary missions of the university, and police & fire are the primary missions of local government. So people often think about those first, also when making cuts. Also, cutting core functions may win you more funding from the state, taxes, etc. than cutting some press secretary.
To solve this, your state must pass some law that distinguished between department funding and other spending, and cuts the other spending. Such a law might ideally :
1) increase or freeze funding to academic departments, chairs, etc.,
2) decrease or freeze tuition and the university's take of grants, and
3) prohibit borrowing or fundraising for any non-academic purpose.
You'd see rapid & deep cuts in associated bureaucracy
posted by jeffburdges at 6:24 AM on February 9, 2009 [1 favorite]
Stimulating the economy by encouraging education builds the intellectual infrastructure of the country, just as building/repairing roads and bridges builds the physical infrastructure. A healthy economy depends on infrastructure.
posted by theora55 at 6:31 AM on February 9, 2009 [1 favorite]
posted by theora55 at 6:31 AM on February 9, 2009 [1 favorite]
delmoi: I don't know. I've always been skeptical of the "personal responsibility" narrative which says that hard work and virtue are sufficient to at least attain the middle class, those who have not achieved the American dream must have failed due to a lack of character or behavior, and therefore the middle class shouldn't be in the position of paying for things like good public schools, health care, or basic food and shelter.
This is just a new iteration of an argument that I've found frustrating for years. And contrary to popular myth, my current solvency and responsible monthly payments on my loans doesn't allow me to forget that I'm a pink slip and a few months away from default.
posted by KirkJobSluder at 6:35 AM on February 9, 2009 [1 favorite]
This is just a new iteration of an argument that I've found frustrating for years. And contrary to popular myth, my current solvency and responsible monthly payments on my loans doesn't allow me to forget that I'm a pink slip and a few months away from default.
posted by KirkJobSluder at 6:35 AM on February 9, 2009 [1 favorite]
Kirk, since I've been the one talking about personal responsibility the most, please understand, in no way do I feel that hard work and virtue alone will make someone set for life, and I certainly don't believe the middle class shouldn't have to pay for things.
What I'm talking about is good financial habits and responsible planning. The country is a mess because of people buying whatever they wanted, even if it meant massive loads of debt. Having the government bail out, well, just about anyone (up to and including the banks which are doing their best to continue to care exclusively about themselves) makes the consequences of debt seem less real to everyone involved.
Screw forgiving debt, create work. There are millions of things needing doing in the States and the world right now. Give people the option, that if they are in such freakish dire straits, to work for the government to repay their loans. Real jobs, with real salaries, jobs that help pull us out of this mess. And this doesn't involve telling the physicist to pick up a shovel, it involves having them teach, or do research. It involves having the doctor working at a free clinic, and yeah, a return to the WPA where artists were employed because their contribution to the culture is noted and valued.
But tossing out government repayments of loans and hoping that the people who are buried by debt and/or unable to find work in their field will turn around and use that now freed up monthly loan money to jump-start the economy? If I'm suddenly unemployed (or underemployed) and I come into a windfall of $X a month, I'm sure as hell not going to spend that money except on absolute neccessities. Anything else goes in the bank. On the other hand, give me a job, my feeling of security rises, and yes, I'll start feeling like I can spend money again.
posted by Ghidorah at 7:00 AM on February 9, 2009 [2 favorites]
What I'm talking about is good financial habits and responsible planning. The country is a mess because of people buying whatever they wanted, even if it meant massive loads of debt. Having the government bail out, well, just about anyone (up to and including the banks which are doing their best to continue to care exclusively about themselves) makes the consequences of debt seem less real to everyone involved.
Screw forgiving debt, create work. There are millions of things needing doing in the States and the world right now. Give people the option, that if they are in such freakish dire straits, to work for the government to repay their loans. Real jobs, with real salaries, jobs that help pull us out of this mess. And this doesn't involve telling the physicist to pick up a shovel, it involves having them teach, or do research. It involves having the doctor working at a free clinic, and yeah, a return to the WPA where artists were employed because their contribution to the culture is noted and valued.
But tossing out government repayments of loans and hoping that the people who are buried by debt and/or unable to find work in their field will turn around and use that now freed up monthly loan money to jump-start the economy? If I'm suddenly unemployed (or underemployed) and I come into a windfall of $X a month, I'm sure as hell not going to spend that money except on absolute neccessities. Anything else goes in the bank. On the other hand, give me a job, my feeling of security rises, and yes, I'll start feeling like I can spend money again.
posted by Ghidorah at 7:00 AM on February 9, 2009 [2 favorites]
I think a lot of people here are missing the point. Who really deserves a handout right now? IMO, nobody. Nevertheless, a ton of money is about to be distributed and we should be focusing on what has the greatest chance of success. We'll all be paying for this for a very, very long time, and I would personally be outraged if all this money gets dumped somewhere and the economy proceeds to tank anyway.
Doing something about education debt is worth at least considering, IMO (whether it's forgiveness, extending deferments, cutting interest rates, or at least easing up on those who are unable make payments and default). It makes sense to me that the demographic most likely to buy a house, a car, a new dinning room set, new appliances, etc., are younger people just starting out their lives. And a lot of these people are unable to make those purchases at the moment due to the current economic climate, plus having a mortgage-sized student loan payment every month.
The ensuing spending frenzy would lead to more jobs and be of benefit to everyone. That's the idea anyway, at least as far as I understand it. Would it work? I have no idea, but it's worth discussing.
posted by sero_venientibus_ossa at 7:37 AM on February 9, 2009
Doing something about education debt is worth at least considering, IMO (whether it's forgiveness, extending deferments, cutting interest rates, or at least easing up on those who are unable make payments and default). It makes sense to me that the demographic most likely to buy a house, a car, a new dinning room set, new appliances, etc., are younger people just starting out their lives. And a lot of these people are unable to make those purchases at the moment due to the current economic climate, plus having a mortgage-sized student loan payment every month.
The ensuing spending frenzy would lead to more jobs and be of benefit to everyone. That's the idea anyway, at least as far as I understand it. Would it work? I have no idea, but it's worth discussing.
posted by sero_venientibus_ossa at 7:37 AM on February 9, 2009
Part of what makes student loans different from many other types of debt is that student loans can not be discharged in a bankruptcy. Combined with the fact that most people take this type of loan on at a very young age and the amounts involved can be very high, this can result in many people having loans that they will not ever be able to pay off completely.
A long time ago, Americans, working through their government, decided that people in this situation should have legal remedies. Being in debt for ones entire life was considered to be a form of slavery. Many of these laws have since been changed in favor of the banks and other entities that make loans. I see no problem with the laws shifting back in favor of the borrower.
posted by jefeweiss at 7:38 AM on February 9, 2009
A long time ago, Americans, working through their government, decided that people in this situation should have legal remedies. Being in debt for ones entire life was considered to be a form of slavery. Many of these laws have since been changed in favor of the banks and other entities that make loans. I see no problem with the laws shifting back in favor of the borrower.
posted by jefeweiss at 7:38 AM on February 9, 2009
The country is a mess because of people buying whatever they wanted, even if it meant massive loads of debt.
That's a controversial point and an oversimplification.
A lot more went into this mess than people buying too much on credit. In fact, the bigger problems driving all that consumer debt spending are wage stagnation and the dramatically increasing income inequality we've seen in the US over the last 20 years or so.
I won't even go into the much larger role that financial sector securities speculation played, because if you're still blaming this on consumers, I have to assume you can't be bothered to understand the issues in their proper context.
But even without getting into the real causes for the crisis, let's take the fictional premise that consumer debt really was the core issue as a given, for the sake of argument.
Even so, blaming the financial crisis on consumers now, consumers who've been encouraged systematically in their consumption patterns by both the government and the private sector on the basis that their consumption was in the best economic interests of the country couldn't be more wrong-headed.
Bush stood before Americans literally within days of 9-11 and told us that the best thing we could do for the country is to continue to spend, to consume--to spend and consume like never before. This same message has been reinforced by commercials, public policy, and the media for so many years now, to suggest for even a moment that the blame lies with consumers is an insult to decency and common sense.
And if we were a civilized country who understood its own self-interests, we wouldn't make qualified university students borrow to get an education in the first place. We'd offer fully subsidized access to higher education, as many European countries do.
But that's not what we are. What we are is a massive company store.
posted by saulgoodman at 7:39 AM on February 9, 2009 [4 favorites]
That's a controversial point and an oversimplification.
A lot more went into this mess than people buying too much on credit. In fact, the bigger problems driving all that consumer debt spending are wage stagnation and the dramatically increasing income inequality we've seen in the US over the last 20 years or so.
I won't even go into the much larger role that financial sector securities speculation played, because if you're still blaming this on consumers, I have to assume you can't be bothered to understand the issues in their proper context.
But even without getting into the real causes for the crisis, let's take the fictional premise that consumer debt really was the core issue as a given, for the sake of argument.
Even so, blaming the financial crisis on consumers now, consumers who've been encouraged systematically in their consumption patterns by both the government and the private sector on the basis that their consumption was in the best economic interests of the country couldn't be more wrong-headed.
Bush stood before Americans literally within days of 9-11 and told us that the best thing we could do for the country is to continue to spend, to consume--to spend and consume like never before. This same message has been reinforced by commercials, public policy, and the media for so many years now, to suggest for even a moment that the blame lies with consumers is an insult to decency and common sense.
And if we were a civilized country who understood its own self-interests, we wouldn't make qualified university students borrow to get an education in the first place. We'd offer fully subsidized access to higher education, as many European countries do.
But that's not what we are. What we are is a massive company store.
posted by saulgoodman at 7:39 AM on February 9, 2009 [4 favorites]
Ghidorah: I'm posing this problem to you again because you continue to fail to acknowledge it. With a 7.2% and rising unemployment rate and no turn-around in sight for the next few years, we are going to see more and more people go into default on their student loans. Most forms of relief for those people will involve some form of "forgiveness" that allows them to pay less or nothing on their loans with reduced or no penalty.
Will debt relief jumpstart the economy? Probably not, but it might allow for a household that has seen its income slashed to prioritize basic needs like housing, food, and health care.
posted by KirkJobSluder at 7:41 AM on February 9, 2009
Will debt relief jumpstart the economy? Probably not, but it might allow for a household that has seen its income slashed to prioritize basic needs like housing, food, and health care.
posted by KirkJobSluder at 7:41 AM on February 9, 2009
I bet if we get enough threads about proposed bailouts of various debts, you could put together a really impressive speadsheet of who on Metafilter a) has a type of debt b) has already paid off a type of debt c) chose to sacrifice something to avoid a type of debt based on the way a person argues in various threads.
posted by jermsplan at 7:52 AM on February 9, 2009
posted by jermsplan at 7:52 AM on February 9, 2009
saulgoodman: Even so, blaming the financial crisis on consumers now, consumers who've been encouraged systematically in their consumption patterns by both the government and the private sector on the basis that their consumption was in the best economic interests of the country couldn't be more wrong-headed.
Well, when I look at the numbers, the vast majority of consumers are making their financial commitments. As much as we had a panic about mortgage foreclosures, the total volume of mortgage foreclosures is still quite small compared to the volume of loans that are paid regularly and on time.
The fact that the underperformance of mortgages compared to expectations triggered a domino effect of credit defaults up the food chain is entirely the fault of financial institutions who were excessively over-leveraged.
posted by KirkJobSluder at 7:57 AM on February 9, 2009
Well, when I look at the numbers, the vast majority of consumers are making their financial commitments. As much as we had a panic about mortgage foreclosures, the total volume of mortgage foreclosures is still quite small compared to the volume of loans that are paid regularly and on time.
The fact that the underperformance of mortgages compared to expectations triggered a domino effect of credit defaults up the food chain is entirely the fault of financial institutions who were excessively over-leveraged.
posted by KirkJobSluder at 7:57 AM on February 9, 2009
Well, when I look at the numbers, the vast majority of consumers are making their financial commitments.
I know, KJS. I'd hoped to make that point clear, too.
But since it seems impossible to defeat this misguided notion going around that defaults on consumer debt were the primary cause of the financial crisis, I figured I'd point out how, even assuming that were the case, the moral culpability still lies higher up the food-chain.
posted by saulgoodman at 8:03 AM on February 9, 2009
I know, KJS. I'd hoped to make that point clear, too.
But since it seems impossible to defeat this misguided notion going around that defaults on consumer debt were the primary cause of the financial crisis, I figured I'd point out how, even assuming that were the case, the moral culpability still lies higher up the food-chain.
posted by saulgoodman at 8:03 AM on February 9, 2009
Well, I know I am in a situation that if/when I have to re=pay at current rates I'll likely have to end up in bankruptcy. A situation of a gamble on graduate education leading to higher income not exactly panning out, especially in today's economy.
posted by edgeways at 8:17 AM on February 9, 2009
posted by edgeways at 8:17 AM on February 9, 2009
Infinite Jest: university charges fees, government pays them, student repays government. Competition for students is the incentive to keep fees low, seeing as students will have to pay back eventually.
Are the students responsible for paying back their own share of the debt, or for making equal, mandatory payments to some pool (a la social security)? If it's the former, I could understand how colleges would still compete over price.
posted by kid ichorous at 8:35 AM on February 9, 2009
Are the students responsible for paying back their own share of the debt, or for making equal, mandatory payments to some pool (a la social security)? If it's the former, I could understand how colleges would still compete over price.
posted by kid ichorous at 8:35 AM on February 9, 2009
kid ichorous: the short answer, it's the latter.
In more detail, using real-life examples. My Masters degree cost me about $7000 (NZ dollars, not US). The actual cost of the degree is about $30,000, I think. The government pays the other $23,000 or whatever it was. That's paid for by the state as its contribution to higher education - I don't have to pay it back, or think about it, at all. It's paid for by taxes.
The $7000, I loaned. I could also have loaned money for living costs, and for other costs (basically text books, or lab fees, or field trip costs). I didn't, because I was part-time, and I had a full-time job, so I was covered for living expenses out of my own income. The government paid the $7000 to my university (really just shuffling money around, seeing as the government owns the universities, though they're independent bodies).
As soon as I stopped studying, I started incurring interest - it was at about 7% last time I looked. Interest is written off, unless you are working outside of NZ (this was introduced to try to keep graduates in the country - a huge number go overseas).
This debt is paid automatically out of my taxes. For any amount i earn over the minimum wage, I pay an extra 10% in tax (e.g. from 15% to 25% at low levels, up to 49% maximum). This continues till I pay off the loan. I can pay it off faster if I choose by making voluntary lump sum payments. If I die or go bankrupt, it's wiped.
It's not perfect (I'd rather see lower or no-interest loans; it was abused when first introduced - people took lump sum loans for "living expenses" and used them to pay for holidays or stereos). But it's OK. [Still, I would have been better off if I'd been five years earlier, and gone through the system when we had free education].
Might be harder in the US given you've got the state/federal system, whereas NZ has just one government (and states own the universities, other than the private ones, IIUC?). But seems like it could be done.
posted by Infinite Jest at 8:57 AM on February 9, 2009 [1 favorite]
In more detail, using real-life examples. My Masters degree cost me about $7000 (NZ dollars, not US). The actual cost of the degree is about $30,000, I think. The government pays the other $23,000 or whatever it was. That's paid for by the state as its contribution to higher education - I don't have to pay it back, or think about it, at all. It's paid for by taxes.
The $7000, I loaned. I could also have loaned money for living costs, and for other costs (basically text books, or lab fees, or field trip costs). I didn't, because I was part-time, and I had a full-time job, so I was covered for living expenses out of my own income. The government paid the $7000 to my university (really just shuffling money around, seeing as the government owns the universities, though they're independent bodies).
As soon as I stopped studying, I started incurring interest - it was at about 7% last time I looked. Interest is written off, unless you are working outside of NZ (this was introduced to try to keep graduates in the country - a huge number go overseas).
This debt is paid automatically out of my taxes. For any amount i earn over the minimum wage, I pay an extra 10% in tax (e.g. from 15% to 25% at low levels, up to 49% maximum). This continues till I pay off the loan. I can pay it off faster if I choose by making voluntary lump sum payments. If I die or go bankrupt, it's wiped.
It's not perfect (I'd rather see lower or no-interest loans; it was abused when first introduced - people took lump sum loans for "living expenses" and used them to pay for holidays or stereos). But it's OK. [Still, I would have been better off if I'd been five years earlier, and gone through the system when we had free education].
Might be harder in the US given you've got the state/federal system, whereas NZ has just one government (and states own the universities, other than the private ones, IIUC?). But seems like it could be done.
posted by Infinite Jest at 8:57 AM on February 9, 2009 [1 favorite]
Interest is written off, unless you are working outside of NZ (this was introduced to try to keep graduates in the country - a huge number go overseas).
Fascinating, I've never seen this suggested in Australia(there is no interest on HECS) but people do complain about the brain drain. But presumably this only prevents the people who intended to go overseas for a few years and then come back - why would you care that the debt is growing if you never plan to return to NZ with an income?
Also interesting that you can wipe it with bankruptcy: I don't think you can in Australia. And we don't have the cost of living loans either, only tuition.
posted by jacalata at 11:14 AM on February 9, 2009
Fascinating, I've never seen this suggested in Australia(there is no interest on HECS) but people do complain about the brain drain. But presumably this only prevents the people who intended to go overseas for a few years and then come back - why would you care that the debt is growing if you never plan to return to NZ with an income?
Also interesting that you can wipe it with bankruptcy: I don't think you can in Australia. And we don't have the cost of living loans either, only tuition.
posted by jacalata at 11:14 AM on February 9, 2009
Also, I think students are responsible for paying back the amount they borrowed, no? So it is the first of kid ichorous' options.
posted by jacalata at 11:15 AM on February 9, 2009
posted by jacalata at 11:15 AM on February 9, 2009
The reason student loans aren't discharged by bankruptcy is that the only sane decision you could make upon graduating would be to declare bankruptcy.
posted by maxwelton at 12:09 PM on February 9, 2009
posted by maxwelton at 12:09 PM on February 9, 2009
Why would you care that the debt is growing if you never plan to return to NZ with an income?
Double taxation agreements. Don't arrange to make payments from overseas, and the NZ Inland Revenue will get you anyway, via deals with the Aussies and the Brits. I'm sure we don't have agreements with everyone, but Australia and the UK are where most of us end up.
[Apologies to Americans for taking this off-topic]
posted by Infinite Jest at 12:39 PM on February 9, 2009
Double taxation agreements. Don't arrange to make payments from overseas, and the NZ Inland Revenue will get you anyway, via deals with the Aussies and the Brits. I'm sure we don't have agreements with everyone, but Australia and the UK are where most of us end up.
[Apologies to Americans for taking this off-topic]
posted by Infinite Jest at 12:39 PM on February 9, 2009
Holy shit, NZ looks like it taxes on the same kind of basis as America (you're basically always a resident for tax purposes?) As an Australian living in the US, I have no taxable AU income, no need to file a tax return, and therefore no HECS repayments due. In Aust. it is completely tied to your income tax, no tax due = no payment due.
posted by jacalata at 1:23 PM on February 9, 2009
posted by jacalata at 1:23 PM on February 9, 2009
The reason student loans aren't discharged by bankruptcy is that the only sane decision you could make upon graduating would be to declare bankruptcy.
Actually, before the bills that were passed changing the student loan rules in the 1990s you could get rid of student loans by declaring bankruptcy. And the vast majority of people paid back their student loans.
posted by jefeweiss at 1:31 PM on February 9, 2009 [1 favorite]
Actually, before the bills that were passed changing the student loan rules in the 1990s you could get rid of student loans by declaring bankruptcy. And the vast majority of people paid back their student loans.
posted by jefeweiss at 1:31 PM on February 9, 2009 [1 favorite]
Saul, Kirk, one last try, then I'm going to let this go. I don't believe that consumers are solely responsible for the crisis. I believe that consumer spending habits have left them horribly unprepared for dealing with the crisis, having embraced debt rather than savings. Why? They were conditioned to doing so by a lot of the companies (and the government) who are largely responsible. From Bush giving everyone $300 and saying, hey, spend it all when people should have done anything but, to people being told, sure, you don't have nearly enough money, but let's get you that house, a lot of things went in to helping people get into massive debt. To me, debt forgiveness, in terms of a big government handout will just reinforce the horrendous habits that have made people unable to weather what's happening now.
That's why I'm in favor of work programs, where things are actually done to make the country better, instead of wiping out loans and hoping that people will spend money, which they likely won't, because they don't have a job, or don't make enough money to do so. People who really need the money, people who will default without it, they could get work and loan repayments through the government.
And what Infinite Jest is talking about, that's at least an idea. American universities are stupidly expensive. Rather than a one time band-aid to the problem (what happens ten years from now, when universities are even more expensive? Another forgiveness?) we need to find a way to bring down the cost of university. It's very unlikely that we can find a way to reduce degree inflation, simply because who is going to tell someone that, no, really you probably shouldn't go to university? If we're going to be a country where everyone should be going to university, we need to find a way to make university affordable. At the same time, we need to try making trade schools seem like a viable alternative, and, as I mentioned above, somehow make them more affordable as well. If we do something to change the actual root of the problem, maybe we can make some headway.
posted by Ghidorah at 1:59 PM on February 9, 2009
That's why I'm in favor of work programs, where things are actually done to make the country better, instead of wiping out loans and hoping that people will spend money, which they likely won't, because they don't have a job, or don't make enough money to do so. People who really need the money, people who will default without it, they could get work and loan repayments through the government.
And what Infinite Jest is talking about, that's at least an idea. American universities are stupidly expensive. Rather than a one time band-aid to the problem (what happens ten years from now, when universities are even more expensive? Another forgiveness?) we need to find a way to bring down the cost of university. It's very unlikely that we can find a way to reduce degree inflation, simply because who is going to tell someone that, no, really you probably shouldn't go to university? If we're going to be a country where everyone should be going to university, we need to find a way to make university affordable. At the same time, we need to try making trade schools seem like a viable alternative, and, as I mentioned above, somehow make them more affordable as well. If we do something to change the actual root of the problem, maybe we can make some headway.
posted by Ghidorah at 1:59 PM on February 9, 2009
lupus_yonderboy:
People love to talk about situations like this as "a failure of the market" while ignoring the massive government interference (most especially corporate welfare, including subsidies, bailouts, and government-granted monopolies) that led to it. I'll concede that better regulations may have helped. But you have to agree that the issue was bad and uneven interference, certainly not no interference. Just off the top of my head, let me cite all the shenanigans Cheney pulled on behalf of Enron.
I'm against this for the same reason I was and am against bailouts to any other portion of the financial services sector (don't pretend it's about education: this isn't funding education, it's paying off yet another set of lenders). It exacerbates the moral hazard and creates an expectation and precedent that the government, the federal government no less, will always be there to mop up, no matter the societal cost. It yet again socializes risk and privatizes profit: profit for those with the now-free education, and for the lenders who got to charge interest and fees based on a risk which will now be obviated. And it creates an artificial floor on yet another good or service, a floor which punishes those who waited until they could afford it and will now be further priced out of the market. Exactly like real estate and exactly like stock market speculation.
But if we're going to have a stimulus, it needs to focus on infrastructure, hard. And not just roads ... and weatherizing? If we're going to spend the money, let's get something better for it. Trains, for a start. And why isn't there a single nuclear plant planned in this whole spending spree? Nuclear power is the solution to so many of our present problems that its omission is ridiculous.
Oh, and if all the funding for this is being routed through the federal government, doesn't that mean that it's subject to all the affirmative action restrictions? Meaning that any business not owned by women or government-favored racial groups need not apply? A lot of people feel slighted already by things like this. As the spending starts, it may not bring the healing of any racial divides that people hope for.
grapefruitmoon,
You're creating a dual-tier society. Those who got their spending in before everything got bailed out, and the suckers, who thought they would have to pay it back, and waited. Now the cost of such things is artificially inflated and their ubiquity is assured.
I say this as someone who would dearly like to pursue further education but has held off in favor of getting a good financial base first. I say this as someone who had mortgage brokers begging for his business but saw that it was a bubble and decided to wait for the price to fall. Thanks for that.
posted by vsync at 2:05 PM on February 9, 2009 [1 favorite]
Here's a question those against this ideaI'm strongly against both, for the same reason I'm against this, and I'm again annoyed as a libertarian that you and others seem to come into these discussions with the idea that anyone against $NOBLE_SOCIAL_PROGRAM must also be in favor of corporate kickbacks.
1. Are you in favour of the previous banker bailout, or the upcoming banker bailout, and if so, why?
People love to talk about situations like this as "a failure of the market" while ignoring the massive government interference (most especially corporate welfare, including subsidies, bailouts, and government-granted monopolies) that led to it. I'll concede that better regulations may have helped. But you have to agree that the issue was bad and uneven interference, certainly not no interference. Just off the top of my head, let me cite all the shenanigans Cheney pulled on behalf of Enron.
I'm against this for the same reason I was and am against bailouts to any other portion of the financial services sector (don't pretend it's about education: this isn't funding education, it's paying off yet another set of lenders). It exacerbates the moral hazard and creates an expectation and precedent that the government, the federal government no less, will always be there to mop up, no matter the societal cost. It yet again socializes risk and privatizes profit: profit for those with the now-free education, and for the lenders who got to charge interest and fees based on a risk which will now be obviated. And it creates an artificial floor on yet another good or service, a floor which punishes those who waited until they could afford it and will now be further priced out of the market. Exactly like real estate and exactly like stock market speculation.
2. If not, what's your suggestion for a strategy to deal with the economic collapse?As a libertarian and an advocate of the states retaining their Constitutional roles, I believe this situation could have been averted by the federal government and state-sponsored monopolies like the Federal Reserve being far more restrained in their actions in the past, and that throwing more of the same at the problem is not likely to help in the long term. I wanted Ron Paul to win. I voted, I donated, and I campaigned. But I said when he lost the nomination that the people had voted for socialism and I would try to participate as a citizen rather than just throw wrenches in the machinery. I would rather it have been Kucinich, but oh well.
But if we're going to have a stimulus, it needs to focus on infrastructure, hard. And not just roads ... and weatherizing? If we're going to spend the money, let's get something better for it. Trains, for a start. And why isn't there a single nuclear plant planned in this whole spending spree? Nuclear power is the solution to so many of our present problems that its omission is ridiculous.
Oh, and if all the funding for this is being routed through the federal government, doesn't that mean that it's subject to all the affirmative action restrictions? Meaning that any business not owned by women or government-favored racial groups need not apply? A lot of people feel slighted already by things like this. As the spending starts, it may not bring the healing of any racial divides that people hope for.
grapefruitmoon,
There are a lot of good points being raised in this discussion, but every time I see an anecdote citing "I chose where I could go to college based on what I can afford and everyone who went to an expensive school deserves to pay through their nose" smacks of sour grapes and not any kind of rational policy analysis.This is simply insulting. To scoff at those who chose to do rational long-term economic planning for themselves, either going to an affordable school or deferring education until they had the money. Instead those who did not make that planning, or took a higher risk, would be rewarded. Meanwhile those who tried to make the responsible situation would be punished. Again, exactly like houses.
You're creating a dual-tier society. Those who got their spending in before everything got bailed out, and the suckers, who thought they would have to pay it back, and waited. Now the cost of such things is artificially inflated and their ubiquity is assured.
I say this as someone who would dearly like to pursue further education but has held off in favor of getting a good financial base first. I say this as someone who had mortgage brokers begging for his business but saw that it was a bubble and decided to wait for the price to fall. Thanks for that.
posted by vsync at 2:05 PM on February 9, 2009 [1 favorite]
The people screaming against student loan forgiveness may have their reasons, but most of what I see from them in this thread is sneering resentment.
Yeah, some of them may resent it. I went to a nice school and was lucky enough to only rack up a little bit of debt. I'm in a stretched out repayment plan (which, I know, will cost me a lot in interest in the long run, but makes it easy on my budget right now) so I'm not really hard-hit by my loan.
However, this kind of debt forgiveness really is wishful thinking. Do I think that bankers are more deserving of cash than poor students? No. But even from a political standpoint, the target demographics of this plan just do not have a lot of power. They're very good at campaigning and getting in touch with others, but unless this is going to a popular vote it's not going through. Most of them do not have a strong relationship with their representative and their representative knows this and can vote accordingly.
Worse, what happens if this measure goes through? As I said above, student loans will disappear. With total loan forgiveness, offering loans to students becomes a negative profit activity. Without a mandate from the government, no bank would loan money to a student, ever again.
Yes, bankers are getting money, but as I understand it their debts are not being "forgiven". In some cases the government is buying back bad investments, and in others they're giving banks money to cover expenses and hopefully to lend money, which is sorely needed right now. Of course, if they don't get serious about lending money I think that Congress and the White House should start leaning on these companies to change their operating behavior. A lot of this money throwing around is to keep the illusion that we have a working financial and monetary system. If we had said, "Okay, all debts are off." then that would have led to a huge collapse of, well, everything. As it is the response has been catastrophic but "at least" we can still go on having business as usual, more or less.
A much better solution would be for the next few years or so, to have something called the "Education Investment Credit" or something of that nature. Basically, the argument is that all of these people went into debt to improve their education, which all things being equally theoretically brings a benefit to the US in terms of a better and more knowledgeable workforce. So, we reward that by making either all or a substantial chunk of student loan payments, not just interest, tax-deductible. If a businessman can take a huge dinner out as a business expense writeoff, then a just-graduated student (or even someone who has been paying off their loan for almost 10 years like me) can deduct the entire cost of their student loan for that year.
So, basically another tax cut, which will in theory appeal to Republicans.
Part 2 of the solution: increase funding for education on the state level. Tuition for state colleges keeps going up because their funding is getting cut by the state as the state government has to divert more and more of its increasingly limited funds towards mandatory budget items like Medicare. If tuition prices could stay stable or even go down, that would be a huge benefit to future students.
Doing both at once means everyone is happy: current students who don't benefit from a tax cut but *do* benefit from reduced tuition, and former students who get the tax cut. And, all this without either requiring someone to pay for all of the existing student debt.
posted by Deathalicious at 2:11 PM on February 9, 2009
Yeah, some of them may resent it. I went to a nice school and was lucky enough to only rack up a little bit of debt. I'm in a stretched out repayment plan (which, I know, will cost me a lot in interest in the long run, but makes it easy on my budget right now) so I'm not really hard-hit by my loan.
However, this kind of debt forgiveness really is wishful thinking. Do I think that bankers are more deserving of cash than poor students? No. But even from a political standpoint, the target demographics of this plan just do not have a lot of power. They're very good at campaigning and getting in touch with others, but unless this is going to a popular vote it's not going through. Most of them do not have a strong relationship with their representative and their representative knows this and can vote accordingly.
Worse, what happens if this measure goes through? As I said above, student loans will disappear. With total loan forgiveness, offering loans to students becomes a negative profit activity. Without a mandate from the government, no bank would loan money to a student, ever again.
Yes, bankers are getting money, but as I understand it their debts are not being "forgiven". In some cases the government is buying back bad investments, and in others they're giving banks money to cover expenses and hopefully to lend money, which is sorely needed right now. Of course, if they don't get serious about lending money I think that Congress and the White House should start leaning on these companies to change their operating behavior. A lot of this money throwing around is to keep the illusion that we have a working financial and monetary system. If we had said, "Okay, all debts are off." then that would have led to a huge collapse of, well, everything. As it is the response has been catastrophic but "at least" we can still go on having business as usual, more or less.
A much better solution would be for the next few years or so, to have something called the "Education Investment Credit" or something of that nature. Basically, the argument is that all of these people went into debt to improve their education, which all things being equally theoretically brings a benefit to the US in terms of a better and more knowledgeable workforce. So, we reward that by making either all or a substantial chunk of student loan payments, not just interest, tax-deductible. If a businessman can take a huge dinner out as a business expense writeoff, then a just-graduated student (or even someone who has been paying off their loan for almost 10 years like me) can deduct the entire cost of their student loan for that year.
So, basically another tax cut, which will in theory appeal to Republicans.
Part 2 of the solution: increase funding for education on the state level. Tuition for state colleges keeps going up because their funding is getting cut by the state as the state government has to divert more and more of its increasingly limited funds towards mandatory budget items like Medicare. If tuition prices could stay stable or even go down, that would be a huge benefit to future students.
Doing both at once means everyone is happy: current students who don't benefit from a tax cut but *do* benefit from reduced tuition, and former students who get the tax cut. And, all this without either requiring someone to pay for all of the existing student debt.
posted by Deathalicious at 2:11 PM on February 9, 2009
Great golly I'd love to have my student loan debt forgiven, but I have a degree in theatre - I don't think I could live with the shame.
posted by Evangeline at 2:38 PM on February 9, 2009
posted by Evangeline at 2:38 PM on February 9, 2009
To scoff at those who chose to do rational long-term economic planning for themselves, either going to an affordable school or deferring education until they had the money. Instead those who did not make that planning, or took a higher risk, would be rewarded. Meanwhile those who tried to make the responsible situation would be punished.
You missed my point. My point is that most people who would benefit from this are people who ARE paying back their loans, and who thought that they would be able to earn enough to do so after leaving college. I scoff at no one, but I think that the "rational long-term economic planning" people are getting their collective panties in a twist that they have to subsidize the mythical "irresponsible" students.
A lot of the comments from this side have been based on anecdotal evidence along the lines of "I could have gone to MIT, but it was too expensive to even apply!" which really, sounds like a lot like bitterness towards the people who decided that it was worth the financial risk. The argument, essentially can be boiled down to "Well, I was responsible, so you're just out of luck!"
How is anyone who paid less for college being uniquely punished? You are not paying back more on your own debts. People who haven't even *gone* to college would also be paying a part. If we're going to get righteous indignation, shouldn't it be on behalf of the people who never even WENT to college?
Really, truly, the "I made wise financial decisions so I don't want to help anyone else!" line of reasoning is condescending to anyone who took out loans to pay for the education that they wanted.
[Note: I went to a private school. I got financial aid. I have a not unreasonable amount of debt and would have gone to a cheaper school had I not qualified for grant assistance. I made the tough choices about college, and I can see both sides of the coin in terms of cost vs. perceived quality of education. I make my loan payments, which are reasonable, and while yeah - I'd prefer not to - I'm totally fine with things as they are because the loans were an investment in my education.]
posted by grapefruitmoon at 3:01 PM on February 9, 2009 [1 favorite]
You missed my point. My point is that most people who would benefit from this are people who ARE paying back their loans, and who thought that they would be able to earn enough to do so after leaving college. I scoff at no one, but I think that the "rational long-term economic planning" people are getting their collective panties in a twist that they have to subsidize the mythical "irresponsible" students.
A lot of the comments from this side have been based on anecdotal evidence along the lines of "I could have gone to MIT, but it was too expensive to even apply!" which really, sounds like a lot like bitterness towards the people who decided that it was worth the financial risk. The argument, essentially can be boiled down to "Well, I was responsible, so you're just out of luck!"
How is anyone who paid less for college being uniquely punished? You are not paying back more on your own debts. People who haven't even *gone* to college would also be paying a part. If we're going to get righteous indignation, shouldn't it be on behalf of the people who never even WENT to college?
Really, truly, the "I made wise financial decisions so I don't want to help anyone else!" line of reasoning is condescending to anyone who took out loans to pay for the education that they wanted.
[Note: I went to a private school. I got financial aid. I have a not unreasonable amount of debt and would have gone to a cheaper school had I not qualified for grant assistance. I made the tough choices about college, and I can see both sides of the coin in terms of cost vs. perceived quality of education. I make my loan payments, which are reasonable, and while yeah - I'd prefer not to - I'm totally fine with things as they are because the loans were an investment in my education.]
posted by grapefruitmoon at 3:01 PM on February 9, 2009 [1 favorite]
If we're going to get righteous indignation, shouldn't it be on behalf of the people who never even WENT to college?
Alvy represent!
Is there a difference between this:
the "I made wise financial decisions so I don't want to help anyone else!" line of reasoning is condescending to anyone who took out loans to pay for the education that they wanted.
and this:
the "I made wise financial decisions so I don't want to help anyone else!" line of reasoning is condescending to anyone who took out loans to pay for the houses that they wanted.
?
posted by jacalata at 3:19 PM on February 9, 2009
Alvy represent!
Is there a difference between this:
the "I made wise financial decisions so I don't want to help anyone else!" line of reasoning is condescending to anyone who took out loans to pay for the education that they wanted.
and this:
the "I made wise financial decisions so I don't want to help anyone else!" line of reasoning is condescending to anyone who took out loans to pay for the houses that they wanted.
?
posted by jacalata at 3:19 PM on February 9, 2009
I would be willing to promise to spend at least of what I get back each month on stuff I don't need life CDs and TVs and beer.
posted by zzazazz at 4:01 PM on February 9, 2009
posted by zzazazz at 4:01 PM on February 9, 2009
Loans to students are often times grossly predatory in all the ways that used to be illegal. Further my 45k loan is now 88k and negatively amortized because that all I can afford to pay with the cost of living and my income.
BTW, in France, college is approx 800 a year, for as long as you want to keep learning.
Moral Hazard my ass. The entire loan industry got a green light to prey on its customers, and stdent loans and the underlying overpriced degree sytems are criminal.
posted by Fupped Duck at 4:02 PM on February 9, 2009 [1 favorite]
BTW, in France, college is approx 800 a year, for as long as you want to keep learning.
Moral Hazard my ass. The entire loan industry got a green light to prey on its customers, and stdent loans and the underlying overpriced degree sytems are criminal.
posted by Fupped Duck at 4:02 PM on February 9, 2009 [1 favorite]
BTW, in France, college is approx 800 a year, for as long as you want to keep learning.
All you people mentioning that university is so much cheaper overseas ought to be aware that none of these countries make students pay thousands of dollars to live in some babysitting cage called a dorm. People upthread saying that $7000 for SUNY was misleading because it didn't include everything up to popcorn for weekly movie nights? Neither do these other figures. UK tuition = $4500. This does not include books, rent or anything. Maybe if students in the US were more open to leading a normal student life, as known in the rest of the world, then they would be able to afford the actual tuition costs of the universities.
posted by jacalata at 4:46 PM on February 9, 2009 [1 favorite]
All you people mentioning that university is so much cheaper overseas ought to be aware that none of these countries make students pay thousands of dollars to live in some babysitting cage called a dorm. People upthread saying that $7000 for SUNY was misleading because it didn't include everything up to popcorn for weekly movie nights? Neither do these other figures. UK tuition = $4500. This does not include books, rent or anything. Maybe if students in the US were more open to leading a normal student life, as known in the rest of the world, then they would be able to afford the actual tuition costs of the universities.
posted by jacalata at 4:46 PM on February 9, 2009 [1 favorite]
Ghidorah: That's why I'm in favor of work programs, where things are actually done to make the country better, instead of wiping out loans and hoping that people will spend money, which they likely won't, because they don't have a job, or don't make enough money to do so.
I'm not unsympathetic to your argument, but hey, if banks can lobby for debt forgiveness and free money with no qualms, then I can, too, and it'd be nice to get the $20,000 my wife and I (mostly my wife, actually) owe off the books. :)
I'm also a proponent of work programs. But there are much deeper systemic problems that need to be addressed over the long term with solutions more meaningful than debt forgiveness or even work programs.
For example, one thing that's really been striking to me as all this unwinds is just how unresponsive and rigid our economy has become.
As the job market collapses and US incomes shrink, you'd expect to see a corresponding decline in the cost of living, but prices aren't really declining at the same pace in any uniform, systematic way. And our economy has become so brittle, it can't respond to those kinds of deflationary pressures without everybody going belly up. Globalization, whatever its merits in the bigger picture, has apparently done little to make the domestic US economy more robust.
posted by saulgoodman at 6:36 PM on February 9, 2009
I'm not unsympathetic to your argument, but hey, if banks can lobby for debt forgiveness and free money with no qualms, then I can, too, and it'd be nice to get the $20,000 my wife and I (mostly my wife, actually) owe off the books. :)
I'm also a proponent of work programs. But there are much deeper systemic problems that need to be addressed over the long term with solutions more meaningful than debt forgiveness or even work programs.
For example, one thing that's really been striking to me as all this unwinds is just how unresponsive and rigid our economy has become.
As the job market collapses and US incomes shrink, you'd expect to see a corresponding decline in the cost of living, but prices aren't really declining at the same pace in any uniform, systematic way. And our economy has become so brittle, it can't respond to those kinds of deflationary pressures without everybody going belly up. Globalization, whatever its merits in the bigger picture, has apparently done little to make the domestic US economy more robust.
posted by saulgoodman at 6:36 PM on February 9, 2009
grapefruitmoon, the whole argument here is about wiping things clean which would reward not just the responsible ones but the profligates as well. How do you propose to discriminate between them besides handwaving? In fact you seem to go back and forth on this.
And yes, it's absolutely punishing everyone for the benefit of a few, not "uniquely". I went into some detail about price inflation, increased expectation of everyone to have the degree, and so forth, so I'm not going to just say it again in hopes you'll read this time.
No one is begrudging you from taking out a loan for education or anything else. I don't have problems with speculation in real estate or stocks either. The problem I have is when you want me and everyone else, many of us who are not in this pickle because we made decisions which turned out to our benefit, to step in and bail you out. How do you plan to do it? Are you going to raise my taxes? Or are you going to just inflate my savings and salary into further uselessness?
This is the very definition of moral hazard.
If you want to talk about socializing education as well, that could be an interesting discussion. But it's a red herring here.
posted by vsync at 7:28 PM on February 9, 2009 [1 favorite]
How is anyone who paid less for college being uniquely punished? You are not paying back more on your own debts. People who haven't even *gone* to college would also be paying a part. If we're going to get righteous indignation, shouldn't it be on behalf of the people who never even WENT to college?Um, didn't you read my post? I was indignationing on their behalf as well. The fact that you don't see the unfairness in this and rail against anyone who sees a problem with it makes me wonder how truly blasé you are about your own loan payments.
And yes, it's absolutely punishing everyone for the benefit of a few, not "uniquely". I went into some detail about price inflation, increased expectation of everyone to have the degree, and so forth, so I'm not going to just say it again in hopes you'll read this time.
Really, truly, the "I made wise financial decisions so I don't want to help anyone else!" line of reasoning is condescending to anyone who took out loans to pay for the education that they wanted.Maybe you should have your loans forgiven, but as a refund from your private school. The flaws in your logic are absolutely astonishing.
No one is begrudging you from taking out a loan for education or anything else. I don't have problems with speculation in real estate or stocks either. The problem I have is when you want me and everyone else, many of us who are not in this pickle because we made decisions which turned out to our benefit, to step in and bail you out. How do you plan to do it? Are you going to raise my taxes? Or are you going to just inflate my savings and salary into further uselessness?
This is the very definition of moral hazard.
If you want to talk about socializing education as well, that could be an interesting discussion. But it's a red herring here.
posted by vsync at 7:28 PM on February 9, 2009 [1 favorite]
On one hand I'd love to have the last of my loans gone.. BUT on the other hand I went to a state school and worked 3 jobs in order to have less loans to pay back once I graduated. So, I'm a bit on the fence about this.
posted by Unred at 7:29 PM on February 9, 2009
posted by Unred at 7:29 PM on February 9, 2009
Dear politicians,
I do not want a tax cut. I do not want my (large, huge) student loan forgiven before I pay it off (after 10 years of paying). I want to be able to say with a straight face that I'm keeping my daughter in California public schools without thinking I'm putting her future in danger. I want infrastructure, a government and health care system that works. Heck, I want zoos and libraries. Yes, it's not in my personal interest, but it's in my best interest.
Dear internet petition writers,
Let's cut the crap with the self-focused, self-involved speculation. If we're not giving away housing, geriatric care and health care before we're giving away money to cover your dorm-and-Tang budget plus money that's already been spent back in the early '90s on professor salaries, I think it's about time there's a coup because we're obviously doing it wrong.
posted by Gucky at 7:45 PM on February 9, 2009 [4 favorites]
I do not want a tax cut. I do not want my (large, huge) student loan forgiven before I pay it off (after 10 years of paying). I want to be able to say with a straight face that I'm keeping my daughter in California public schools without thinking I'm putting her future in danger. I want infrastructure, a government and health care system that works. Heck, I want zoos and libraries. Yes, it's not in my personal interest, but it's in my best interest.
Dear internet petition writers,
Let's cut the crap with the self-focused, self-involved speculation. If we're not giving away housing, geriatric care and health care before we're giving away money to cover your dorm-and-Tang budget plus money that's already been spent back in the early '90s on professor salaries, I think it's about time there's a coup because we're obviously doing it wrong.
posted by Gucky at 7:45 PM on February 9, 2009 [4 favorites]
If we're going to get righteous indignation, shouldn't it be on behalf of the people who never even WENT to college?
>Alvy represent!
*Covers face with coat, mumbles something about not being all that indignant, really*
posted by Alvy Ampersand at 10:27 PM on February 9, 2009
>Alvy represent!
*Covers face with coat, mumbles something about not being all that indignant, really*
posted by Alvy Ampersand at 10:27 PM on February 9, 2009
The fact that you don't see the unfairness in this and rail against anyone who sees a problem with it makes me wonder how truly blasé you are about your own loan payments.
Sorry, you're just going to have to keep wondering. I don't intend on turning this into a debate on whether or not I approach my own finances with enough seriousness. In hindsight, I shouldn't have brought up my own situation, I just did so thinking that it wasn't fair to criticize those who were bringing up their own loans (or lack thereof) without disclosing mine.
If you would like to continue telling me how my education totally failed me, you're welcome to MeMail me.
posted by grapefruitmoon at 4:16 AM on February 10, 2009
Sorry, you're just going to have to keep wondering. I don't intend on turning this into a debate on whether or not I approach my own finances with enough seriousness. In hindsight, I shouldn't have brought up my own situation, I just did so thinking that it wasn't fair to criticize those who were bringing up their own loans (or lack thereof) without disclosing mine.
If you would like to continue telling me how my education totally failed me, you're welcome to MeMail me.
posted by grapefruitmoon at 4:16 AM on February 10, 2009
Aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaah!
posted by Pater Aletheias at 1:19 PM on February 10, 2009
posted by Pater Aletheias at 1:19 PM on February 10, 2009
You know, we should've just closed this up after the first two comments.
posted by dirtdirt at 3:19 PM on February 10, 2009 [1 favorite]
posted by dirtdirt at 3:19 PM on February 10, 2009 [1 favorite]
People upthread saying that $7000 for SUNY was misleading because it didn't include everything up to popcorn for weekly movie nights? Neither do these other figures. UK tuition = $4500. This does not include books, rent or anything. Maybe if students in the US were more open to leading a normal student life, as known in the rest of the world, then they would be able to afford the actual tuition costs of the universities.
Um, are we supposed to think that is a large number? Tuition for a state school like UVA is $9,000. This does not include books, rent or anything, either. When Americans complain about expensive schools, it is because it is frikken expensive, okay?!? Oh, and that $9k? That's in-state. Out of state, tuition is $29k which does not include books, rent or anything. Get the picture? If you go to a private university, which often honestly is not always a "luxury" decision because some states just don't have good schools, tuition can start at $35k and just keep on going up and up.
We're not whining about popcorn, okay? We're whining about being reamed.
As far as non-tuition expenses: with the possible exception of London, and honestly even there, the cost of living is really low in Europe. I don't know why there's this illusion that Europe is more expensive to live in than the US; this might be true when comparing London to the Midwest, but not when comparing anywhere else in Europe to anywhere on the East or West coasts. And actually you can find really decent places to flatshare in London for 80 a week. Even back when a pound=$2 that's just $600 a month or so. In DC or New York you could easily shell out $1000 a month to share a similarly located and sized apartment. Rent is crazy expensive here, and food is more expensive too. In London I noticed that it was ridiculously more expensive to eat out, but if you did your own cooking you would easily pay less. Pasta is cheaper, bread is waaay cheaper, fruits and vegetabes are cheaper because there are hardly any markets in the US (most of our outdoor markets are geared towards the wealthy, so you're actually going to pay more than you would in a grocery store), meat is cheaper, and so on. We pay less taxes overall, of course, although since students aren't generally known for making large salaries that's not a big help.
posted by Deathalicious at 1:33 AM on February 11, 2009
Um, are we supposed to think that is a large number? Tuition for a state school like UVA is $9,000. This does not include books, rent or anything, either. When Americans complain about expensive schools, it is because it is frikken expensive, okay?!? Oh, and that $9k? That's in-state. Out of state, tuition is $29k which does not include books, rent or anything. Get the picture? If you go to a private university, which often honestly is not always a "luxury" decision because some states just don't have good schools, tuition can start at $35k and just keep on going up and up.
We're not whining about popcorn, okay? We're whining about being reamed.
As far as non-tuition expenses: with the possible exception of London, and honestly even there, the cost of living is really low in Europe. I don't know why there's this illusion that Europe is more expensive to live in than the US; this might be true when comparing London to the Midwest, but not when comparing anywhere else in Europe to anywhere on the East or West coasts. And actually you can find really decent places to flatshare in London for 80 a week. Even back when a pound=$2 that's just $600 a month or so. In DC or New York you could easily shell out $1000 a month to share a similarly located and sized apartment. Rent is crazy expensive here, and food is more expensive too. In London I noticed that it was ridiculously more expensive to eat out, but if you did your own cooking you would easily pay less. Pasta is cheaper, bread is waaay cheaper, fruits and vegetabes are cheaper because there are hardly any markets in the US (most of our outdoor markets are geared towards the wealthy, so you're actually going to pay more than you would in a grocery store), meat is cheaper, and so on. We pay less taxes overall, of course, although since students aren't generally known for making large salaries that's not a big help.
posted by Deathalicious at 1:33 AM on February 11, 2009
According to this article, the average in-state tuition at a four-year school is $6,585; here is a breakdown of the averages by state (with New York being about $800 below the fifty-state average).
C'mon. That's a base tuition at the cheapest school in the state, before fees, books, room and board, etc. etc. You didn't specify tuition only
BTW, in France, college is approx 800 a year, for as long as you want to keep learning.
UK tuition = $4500. Um, are we supposed to think that is a large number?
No you're not. You're supposed to see that the actual cost of tuition can be similar in the US to other countries - this is what you would pay to go to Bumfuckton College, UK (as well as much more prestigious institutions), which can surely be compared to SUNY.
The popcorn may have been an unfair comment. What I was responding to was people in this thread arguing that it is unfair to give just the tuition cost of a university, and others quoting the tuition cost of foreign universities, and regular, often crappy 'state' universities at that. (French Grandes Ecoles ~= Ivy League, similarly out of reach to most of the population). Have you ever been to a university in France? It's a set of concrete boxes. None of this 'college experience' as in America. You can't compare the price of having a lecturer turn up and talk at you for 1.5 hours/week to the price of having a heated, wified, catered dorm with funded football teams. 'Tuition' in the US is ridiculous at least partly because it includes 'living there' - and they can make it compulsory!?! Of course poor students can't afford that, maybe they could afford the loans for class if they were allowed to live in a crappy apartment an hours commute away sharing a room with two other students. Private college may, in some minority of cases, be 'necessary', but I'm willing to bet that for many students it isn't.
What you are saying is that the cost of living in the US is an issue, not necessarily the tuition (as in, price of classes). Perhaps that should be dealt with separately to 'higher education', as it isn't just about students but poor people in general? And that is a whole more complicated issue anyway, where we have to start dealing with average salaries, salary purchasing power, etc etc (which I don't know about much).
posted by jacalata at 12:31 PM on February 11, 2009
C'mon. That's a base tuition at the cheapest school in the state, before fees, books, room and board, etc. etc. You didn't specify tuition only
BTW, in France, college is approx 800 a year, for as long as you want to keep learning.
UK tuition = $4500. Um, are we supposed to think that is a large number?
No you're not. You're supposed to see that the actual cost of tuition can be similar in the US to other countries - this is what you would pay to go to Bumfuckton College, UK (as well as much more prestigious institutions), which can surely be compared to SUNY.
The popcorn may have been an unfair comment. What I was responding to was people in this thread arguing that it is unfair to give just the tuition cost of a university, and others quoting the tuition cost of foreign universities, and regular, often crappy 'state' universities at that. (French Grandes Ecoles ~= Ivy League, similarly out of reach to most of the population). Have you ever been to a university in France? It's a set of concrete boxes. None of this 'college experience' as in America. You can't compare the price of having a lecturer turn up and talk at you for 1.5 hours/week to the price of having a heated, wified, catered dorm with funded football teams. 'Tuition' in the US is ridiculous at least partly because it includes 'living there' - and they can make it compulsory!?! Of course poor students can't afford that, maybe they could afford the loans for class if they were allowed to live in a crappy apartment an hours commute away sharing a room with two other students. Private college may, in some minority of cases, be 'necessary', but I'm willing to bet that for many students it isn't.
What you are saying is that the cost of living in the US is an issue, not necessarily the tuition (as in, price of classes). Perhaps that should be dealt with separately to 'higher education', as it isn't just about students but poor people in general? And that is a whole more complicated issue anyway, where we have to start dealing with average salaries, salary purchasing power, etc etc (which I don't know about much).
posted by jacalata at 12:31 PM on February 11, 2009
What you are saying is that the cost of living in the US is an issue, not necessarily the tuition (as in, price of classes).
No, what I am saying is you suggested that tuition is cheap here in the US and we're just a bunch of whiny students who want to eat fancy food and stay in swanky dorm rooms.
In fact, tuition is NOT cheap, $6k is about the lowest tuition you will find, anywhere and is not representative; it is usually much more and that assumes staying in-state. Unless I'm mistaken, there is no such thing as "out of state" in the UK, so public schools across the UK are all inexpensive, which is not true in the US.
(as well as much more prestigious institutions)
Oh, what?!? Prestigious institutions charge the same as Bumfuck in the UK? It does not work that way in the US. Good public schools are difficult for in-staters to get into, and near impossible for out of staters to get into. So you either choose a lower grade in state institution, or maybe you go for a private school. Either way, I'm going to say that on average public universities/colleges, good or bad, charge twice the tuition that schools in the UK do.
Also, an undergraduate degree in the US takes 4 years, not 3 as in the UK, for whatever reason. That means that even if tuition was the same a degree would cost 33% more no matter what. Masters are two years, not just one, and are considerably more expensive unless you get a fellowship. Again, even if the tuition is the same it is more expensive, this time 100% percent more. For some careers, not having a Masters is not an option.
My aside on cost of living was just that, an aside. Yes the cost of living is higher, but that was again to offset any suggestion that students are somehow splurging on nonessentials. They're not, it just is expensive to live here.
And don't get me started on overdrafts. When I first heard what overdraft meant in the UK I was floored. For those who don't know, basically, it is free money. Here in the US, if you spend money not in your account, you are overdrawn and pay a fee (usually $30 for each transaction). If you have what is known as overdraft protection, then the fees are less (generally $5) and the amount you are overdrawn is added to a line of credit, often a credit card, at rates of around 10% or more. As I understand it, in the UK, the bank will say something like, "You have a £3k overdraft" and that means that if you have £3 in your bank account you can spend £3,003 without incurring any fees or paying any interest. Ever. Do I have that right? Because we don't have that here in the US. If we need to spend money we don't have, our only option is a credit card charging us 10% a month (often more since we're unreliable students). And again, if something goes wrong and we miscalculate our balance and we go a bit under, the bank gets $30.
Plenty of students opt to live in crappy apartments rather than student dorms. Most do it for the independence; with a few exceptions dorm costs are on par with apartment costs. For one thing, utilities are generally not included and dorms are almost always well heated while crappy apartments (usually houseshares) are drafty old buildings that cost a lot to heat each month.
Tuition does not include living there. Here's a run down of costs at the University of Virginia that I mentioned above, a really excellent public school. As you can see, tuition is $9k. This is because state funding from the government was slashed, which meant that university funding from the state was slashed. Tuition rates keep going up. When I was looking at UVa 10+ years ago, I'm pretty sure the tuition was closer to $3-4k. So, we see that room is $4k a year. Assuming 8 months or so of stay, that translates to $500 per month. I can tell you that unless you want to do a houseshare in a drafty house miles from campus (and then basically offset your savings with transportation costs; you will have to have a car because public transportation is nonexistant outside of the city center) you are not going to find a better price per month. There are some roomshares that might be as little as $400/month. Board is $3k. This includes food at the local cafeteria. Sometimes more than one option even. Often, it is mandatory for first years to be on the food plan. If you live off campus, your necessary expenses (tuition, books, and travel) at UVA, before food and shelter, are around $11k. And for non-Virginians, the costs are obscene: over $30K before you've spent a dollar on housing or food.
This is what people are talking about, okay? This is why there's a lot of upset about the costs of schooling here. Yes, part of the costs of going to school are non-tuition expenses, but out of the $20k estimated costs for a year of schooling, over half of that is tuition/books.
posted by Deathalicious at 1:38 PM on February 11, 2009
No, what I am saying is you suggested that tuition is cheap here in the US and we're just a bunch of whiny students who want to eat fancy food and stay in swanky dorm rooms.
In fact, tuition is NOT cheap, $6k is about the lowest tuition you will find, anywhere and is not representative; it is usually much more and that assumes staying in-state. Unless I'm mistaken, there is no such thing as "out of state" in the UK, so public schools across the UK are all inexpensive, which is not true in the US.
(as well as much more prestigious institutions)
Oh, what?!? Prestigious institutions charge the same as Bumfuck in the UK? It does not work that way in the US. Good public schools are difficult for in-staters to get into, and near impossible for out of staters to get into. So you either choose a lower grade in state institution, or maybe you go for a private school. Either way, I'm going to say that on average public universities/colleges, good or bad, charge twice the tuition that schools in the UK do.
Also, an undergraduate degree in the US takes 4 years, not 3 as in the UK, for whatever reason. That means that even if tuition was the same a degree would cost 33% more no matter what. Masters are two years, not just one, and are considerably more expensive unless you get a fellowship. Again, even if the tuition is the same it is more expensive, this time 100% percent more. For some careers, not having a Masters is not an option.
My aside on cost of living was just that, an aside. Yes the cost of living is higher, but that was again to offset any suggestion that students are somehow splurging on nonessentials. They're not, it just is expensive to live here.
And don't get me started on overdrafts. When I first heard what overdraft meant in the UK I was floored. For those who don't know, basically, it is free money. Here in the US, if you spend money not in your account, you are overdrawn and pay a fee (usually $30 for each transaction). If you have what is known as overdraft protection, then the fees are less (generally $5) and the amount you are overdrawn is added to a line of credit, often a credit card, at rates of around 10% or more. As I understand it, in the UK, the bank will say something like, "You have a £3k overdraft" and that means that if you have £3 in your bank account you can spend £3,003 without incurring any fees or paying any interest. Ever. Do I have that right? Because we don't have that here in the US. If we need to spend money we don't have, our only option is a credit card charging us 10% a month (often more since we're unreliable students). And again, if something goes wrong and we miscalculate our balance and we go a bit under, the bank gets $30.
Plenty of students opt to live in crappy apartments rather than student dorms. Most do it for the independence; with a few exceptions dorm costs are on par with apartment costs. For one thing, utilities are generally not included and dorms are almost always well heated while crappy apartments (usually houseshares) are drafty old buildings that cost a lot to heat each month.
Tuition does not include living there. Here's a run down of costs at the University of Virginia that I mentioned above, a really excellent public school. As you can see, tuition is $9k. This is because state funding from the government was slashed, which meant that university funding from the state was slashed. Tuition rates keep going up. When I was looking at UVa 10+ years ago, I'm pretty sure the tuition was closer to $3-4k. So, we see that room is $4k a year. Assuming 8 months or so of stay, that translates to $500 per month. I can tell you that unless you want to do a houseshare in a drafty house miles from campus (and then basically offset your savings with transportation costs; you will have to have a car because public transportation is nonexistant outside of the city center) you are not going to find a better price per month. There are some roomshares that might be as little as $400/month. Board is $3k. This includes food at the local cafeteria. Sometimes more than one option even. Often, it is mandatory for first years to be on the food plan. If you live off campus, your necessary expenses (tuition, books, and travel) at UVA, before food and shelter, are around $11k. And for non-Virginians, the costs are obscene: over $30K before you've spent a dollar on housing or food.
This is what people are talking about, okay? This is why there's a lot of upset about the costs of schooling here. Yes, part of the costs of going to school are non-tuition expenses, but out of the $20k estimated costs for a year of schooling, over half of that is tuition/books.
posted by Deathalicious at 1:38 PM on February 11, 2009
When I first heard what overdraft meant in the UK I was floored.
I know what they are, but we don't have them in Australia.
your necessary expenses (tuition, books, and travel) at UVA, before food and shelter, are around $11k...This is what people are talking about, okay? This is why there's a lot of upset about the costs of schooling here.
So, costs at my university in Australia: $7500 tuition per year, $20,000 projected living costs per year. We don't have to pay our fees up front (we have a much better loan system, without interest) but we also can't take loans for living expenses - 30% of students qualify for a government payment (~$8k/year at most), the rest get money from their parents, get a job and earn it, or if possible, live at home while studying. Most students living out of home also do without half the mentioned costs and live on about $13-$15k a year.
So,it looks to me like cost of living is approximately equal. In my opinion, this should not be considered a necessary part of a student loan. You can't afford to live, then take a year (or six) off studying to work and save. (Obviously this is harder in a recession, but the recession is recent and did not affect students now paying back loans). (We don't have out-of-state tuition either, but it is very uncommon for students to move interstate for university. You go to a university where you live. Also, we don't have state taxes or such - our states are much less independent than yours).
I do not consider $11k an obscene cost for a year of schooling. IF there are states that literally do not offer a decent higher education, then there's your problem. Which states? Why isn't there widespread outrage directed at that state? Otherwise, it is students making a choice to attend an expensive private school, and a society that encourages that choice, and minimises the consequences and costs involved, which will not be changed by a government forgiving all current loans.
As suggested occasionally above, I think the best thing the government could do would be remove interest charges on all student loans. The best thing students could do would be to stop taking loans to pay for living expenses, and to avoid colleges that make dorm living/etc compulsory.
posted by jacalata at 3:10 PM on February 11, 2009
I know what they are, but we don't have them in Australia.
your necessary expenses (tuition, books, and travel) at UVA, before food and shelter, are around $11k...This is what people are talking about, okay? This is why there's a lot of upset about the costs of schooling here.
So, costs at my university in Australia: $7500 tuition per year, $20,000 projected living costs per year. We don't have to pay our fees up front (we have a much better loan system, without interest) but we also can't take loans for living expenses - 30% of students qualify for a government payment (~$8k/year at most), the rest get money from their parents, get a job and earn it, or if possible, live at home while studying. Most students living out of home also do without half the mentioned costs and live on about $13-$15k a year.
So,it looks to me like cost of living is approximately equal. In my opinion, this should not be considered a necessary part of a student loan. You can't afford to live, then take a year (or six) off studying to work and save. (Obviously this is harder in a recession, but the recession is recent and did not affect students now paying back loans). (We don't have out-of-state tuition either, but it is very uncommon for students to move interstate for university. You go to a university where you live. Also, we don't have state taxes or such - our states are much less independent than yours).
I do not consider $11k an obscene cost for a year of schooling. IF there are states that literally do not offer a decent higher education, then there's your problem. Which states? Why isn't there widespread outrage directed at that state? Otherwise, it is students making a choice to attend an expensive private school, and a society that encourages that choice, and minimises the consequences and costs involved, which will not be changed by a government forgiving all current loans.
As suggested occasionally above, I think the best thing the government could do would be remove interest charges on all student loans. The best thing students could do would be to stop taking loans to pay for living expenses, and to avoid colleges that make dorm living/etc compulsory.
posted by jacalata at 3:10 PM on February 11, 2009
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