Robin Hood Goes All Entitlement'y
There's this idea floating around now of canceling student loan debt.
David Leonhardt writes in The New York Times
Major publications have published columns promoting the idea. Almost 20 House Democrats have signed on to a bill -- written by Jared Polis, Colorado's governor-elect -- that would cancel all debt. It's also a priority for Alexandria Ocasio-Cortez, the high-profile incoming House member from the Bronx.The allure is clear enough. Americans now hold about $1.4 trillion in student debt. Eliminating it seems like the kind of bold, progressive idea that Democrats should embrace.
But it's actually a bad idea. It is the sort of proposal -- alluring but counterproductive -- that Democrats should avoid as they build an agenda.
The fatal flaw of universal student-debt cancellation is that it's not, in fact, progressive. It mostly benefits the upper middle class. "Education debt," as Sandy Baum and Victoria Lee of the Urban Institute have written, "is disproportionately concentrated among the well-off." The highest-earning quarter of the population holds about half of all student debt, according to Baum and Lee. Which means that universal student debt cancellation would be a giant welfare program for the bourgeoisie.
As I saw somebody (wish I remembered whom) say on Twitter: If you're going to do this, the way to do it fairly is just give everybody a pile of money -- not just those who racked up debt paying for college.
Um, no.
As Adrian Moore tweeted:
Eliminating all student debt isn't progressive--it would be a huge handout to upper middle class. And it's not conservative--they are loans, borrowers need to be responsible, and it's taxpayer money. https://t.co/Pbz6ne4iif
— Adrian Moore (@reasonpolicy) November 19, 2018
The fatal flaw of universal student-debt cancellation is that it's not, in fact, progressive. It mostly benefits the upper middle class.
I don't care whom it benefits. It's a ludicrous notion that rewards saps at the expense of the street smart.
If someone thinks that entering adulthood with a five- or six-figure debt is worthwhile, then perhaps he or she didn't have the goddamn common sense to get into college in the first place.
The sooner that student debt is seen as a millstone -- and that college is seen as a racket for most -- is the sooner that the country can begin to right itself.
Kevin at November 19, 2018 11:22 PM
Well as a conservative who is tired of losing I like the idea. The universities are centers of anti-white, anti-male thought and serve as indoctrination centers for liberal ideology. So let's cancel student debt and hurt the universities. Hopefully this will create a crises and the humanities will be defunded and destroyed.
The thought of Women's studies professors losing their job and starving to death (dare to dream) makes me happy. Is that wrong? Well the left works very hard to make sure conservatives lose their jobs.
Beyond that college is not for everyone. Only the smartest people should go to college. A lot of average teenagers who did not have the IQ to go to college, and who didn't need to go to college where tricked into lifelong debt slavery. For example my friend's girlfriend is a Yoga instructor. You don't need to go to college to become a yoga instructor. But she was tricked into going to college so now she will never pay off her student loans; that's why my friend won't marry her by the way. Who tricked her? Well all of society just expects everyone to go to college. And universities don't try to discourage anyone because they want the money. In other words universities knowingly take money from people who they know will not benefit from a college education.
So ya screw "muh lolbertarian principles." It's time to play to win.
Jewish Cat at November 19, 2018 11:40 PM
Possibly, no one notices that this means crippling the idea of getting student loan in the future. Why should your ten-year-old pay when she gets there if you debt was excused?
Your algebra teacher is beating on you right now, though, because you should notice what happens if you do the same thing across the equation.
Radwaste at November 20, 2018 3:32 AM
What about reducing the need for student debt?
Personally (being a British Liberal so in American terms a Communist) I feel that university should be free to access but harder to get in.
It shouldn't be about your ability to pay or to rack up debt but your ability to learn.
(I quite like socialised healthcare too when my government isn't trying to ruin it. Though again you need to move towards it slowly. I do understand your arguments against it.)
Simon Proctor at November 20, 2018 5:31 AM
Jewish Cat, the schoools already got the money, so this doesn't hurt them at all. Its the taxpayer who gets screwed by this plan. I'd be sorta ok with this, but only if the gov't then got completely out of the student loan business. Since that's not going to happen, as a taxpayer I want payment in full on all student loans.
RS at November 20, 2018 5:37 AM
The big problem with rising tuition and the resultant rising student debt is that there's too much free money in the system. Schools raise tuition to get a bigger piece of the free money pie, so the loan limits are raised to reflect the new tuition.
Students are the ones left holding the bill for all this. Politicians happily raise the loan limits, approve the increased tuition for state-run colleges, and pontificate about college-for-all; with no thoughts at all about the increasing debt in the system.
The solution just might be to end the student loan program and go back to a pay-as-you-go system wherein colleges will have to make themselves affordable. No more student life centers with state-of-the-art rock-climbing walls and indoor hockey rinks (like the one I saw on a visit to Sacramento State), just a focus on academics.
No more college-credit classes on the physics of Star Trek or the socio-cultural ramifications of The Simpsons, and no more superfluous grievance studies departments greedily sucking up funds like a vampire at a blood bank.
Conan the Grammarian at November 20, 2018 5:47 AM
Finally, a welfare plan that can benefit some of my close realatives.
But wait, how is it fair to those that scrimped and saved for years who don’t have debt? How is it fair to those who gave up a dream to avoid debt? How is it fair to those that had a bare-bones experience because they lived at home and worked two jobs to get through school instead of accruing tons of debt.
If the government is going to pay for school, I can support that idea. It would need to be more of a meritocracy though, and that is controversial. Also, I don’t want to pay for the college experience. Cut out the stadiums, water parks, and fancy perks. I don’t mind paying for bicycle lanes though.
Jen at November 20, 2018 5:49 AM
"Which means that universal student debt cancellation would be a giant welfare program for the bourgeoisie."
Yes, but that is common for progressives. I know all about the advertising, but in real life progressives are all about welfare for the rich.
Ben at November 20, 2018 6:57 AM
It shouldn't be about your ability to pay or to rack up debt but your ability to learn.
That's racist, transphobic, homophobic and misogynist and quite possibly xenophobic. I denounce you. Please report to your nearest gulag.... errr.... reeducation center for further indoctrination in Right Thought.
I R A Darth Aggie at November 20, 2018 7:15 AM
Jewish Cat, the schoools already got the money, so this doesn't hurt them at all.
Unless the lenders are fully insulated from any loan forgiveness, going forward they'll be less likely to give loans to just any one, and more likely to demand higher interest rates. Cutting the number of people who can afford to go to college.
So, it may not hurt the tenured professorate just yet, but it will down the road a piece. When the higher-ed bubble finally bursts.
I R A Darth Aggie at November 20, 2018 7:22 AM
For example my friend's girlfriend is a Yoga instructor. You don't need to go to college to become a yoga instructor. But she was tricked into going to college so now she will never pay off her student loans; that's why my friend won't marry her by the way.
_____________________________________
I don't blame anyone for refusing to marry anyone who is in debt. (Also, IMO, anyone who is not only in debt but is super-desperate for money shouldn't even be dating. Watch out for anyone in that situation and Stay Away. Of course, that person is not going to tell you until there's an emotional bond and you can be guilt-tripped into helping.)
But...plenty of men and women alike won't marry someone who can't support at least TWO people, since anyone can meet with an accident and thus need to be supported. If yoga instructors can usually do that, it's news to me. My point is that for women, especially, going to college CAN be very important if, some day, they find they need a higher-paying job than the one they have. (Hint: Even cops often have to go to college these days, just to qualify.)
lenona at November 20, 2018 7:25 AM
My point is that for women, especially, going to college CAN be very important if, some day, they find they need a higher-paying job than the one they have.
True. Just as long as they understand that majoring in $GENDER_STUDIES or $RACE_STUDIES pretty much prepares them to either go to gradual school, or to be a barista at Starbucks.
Maybe they should try the local vo-tech? learn plumbing, or electrical work, or HVAC. It is a year or less, and is relatively less expensive and you'll be gainfully employed sooner.
Example:
https://www.tcc.fl.edu/workforce-development/individuals/better-career-in-a-year/
I see that being able to mangle Microsoft Office to your will is still a sought after skill that isn't as icky as being a plumber, so. On the other hand, once you get the taste of real money it's hard to go back and being a broke student.
I R A Darth Aggie at November 20, 2018 8:09 AM
Except that not working in the field can render that degree in the field moot.
So, those years as a yoga instructor may not count in getting the job that liberal arts degree was supposed to get you, and may actually hold you back as employers look at recent experience or training.
And if you have a STEM degree, don't waste your time teaching yoga if you think you'll ever want to work in that field. Just a few years with no experience or education can mean obsolescence in technical fields.
Conan the Grammarian at November 20, 2018 8:50 AM
The problem with student loans is that the lender--the federal government--has no skin in the game. Student loans can't be discharged in bankruptcy, but apparently taxpayers could be on the hook for them. In that case, students wouldn't have any skin in the game, either.
Students should be responsible for their loans--but a lender who hands over $100,000 to a teenager to get a liberal arts degree should be on the hook, too. Meaning, lending should be privatized and student loans should be just as subject to discharge in bankruptcy as any other loan.
This would also help trim back college attendance to reasonable levels. The market is glutted with college graduates--even STEM degrees are granted at two to three times the rate the market can absorb them. Hopefully, trimming back attendance would also mean trimming back tuition prices.
Lori Miller at November 20, 2018 9:05 AM
How do you get "tricked into going to college?" You get tricked into playing three-card monte, but that lasts only a few minutes. College lasts four or more years. So, for four years, she was "tricked?"
And, unlike the military, you're free to quit at any time.
Sorry, toots, but after the first year, it's no longer that you got "tricked" into doing it. You're in it of your own volition, now.
Conan the Grammarian at November 20, 2018 9:19 AM
What Kevin said:
"I don't care whom it benefits. It's a ludicrous notion that rewards saps at the expense of the street smart."
No one put a gun to their head and made them take on that debt. I don't care if they felt "tricked" or whatever. If you ran up the debt - you must pay it back. period.
If student debt is "forgiven" it will just be a matter of time before they demand (and expect to get) something else for free.
You know, free car, free housing, free food. (I'd throw free birth control into that sentence; but, they have already demanded that)
charles at November 20, 2018 9:28 AM
Not going to lie, this is one boondoggle I'd benefit highly from, unlike literally every other handout to date. I'm not voting dem, but if they do this I wont cry.
Yeah, i have principles until i see a way for me to, finally, benefit.
Momof4 at November 20, 2018 9:51 AM
All you need to do is allow student loans to be dischargeable in bankruptcy just like any other loan, and all the inefficiencies in the system will clear themselves pretty quickly. Loans for no hope degrees will dry up.
Snoopy at November 20, 2018 10:06 AM
So we screw all the saps who scrimped and saved and went to a cheaper state school and then paid off their loans?
It's not just having your cake and eating it too. It's also getting to eat your neighbor's cake because they saved for it.
Curtis at November 20, 2018 10:07 AM
> The problem with student loans
> is that the lender--the federal
> government--has no skin in
> the game.
Well, yeah, but government's just the drug dealer here. It's the educators & administrators who are the junkie.
I like Iowahawk's solution: Make the schools co-sign for student loans.
Crid at November 20, 2018 10:14 AM
> It's time to play to win.
I love when people say things like that... As if the world suddenly came to full consciousness in this moment, and nobody ever had in competitive or corrupting ideas heretofore.
Crid at November 20, 2018 10:15 AM
> And if you have a STEM degree, don't
> waste your time teaching yoga
n recent years, Thiel has given a bunch of speeches suggesting that for most of postwar America and perhaps including this very moment (I can't remember), engineering degrees were not the best imaginable investments. Steady, but not aggressively remunerative.
Crid at November 20, 2018 10:18 AM
One problem with that, student loans are mostly federally guaranteed. That's the reason they have such a low interest rate despite such a high default rate. So, even if the debts are dischargeable with bankruptcy, the taxpayer is still on the hook to pay off the lender and absorb the loss.
You'd have to also remove the federal guarantee to let bankruptcy solve the problem. With that, you'd see a much higher interest rate and fewer payment delay options - deferments, forebearances, etc. - than graduates have now.
The federal guarantee removes the risk to the lender, so as long as that is a part of the program, lenders will not charge for risk, making the program essentially a giveaway to both lenders and students.
All this is part and parcel of what I posted at November 20, 2018 5:47 AM about ending the program altogether and going back to a pay-as-you-go situation. Lenders would be free to offer education loans, but would then be able to charge for risk and pursue rigorous collections efforts.
Conan the Grammarian at November 20, 2018 10:19 AM
Hey! Snoopy's in here! Maybe he wants to give us some specific stock market tips for today!
Crid at November 20, 2018 10:20 AM
I assume this means they are going to pay me back for the student debt I PAID OFF.
NicoleK at November 20, 2018 10:22 AM
On a less snarky note, the places that have free tuition tend to severely limit the amount of people who qualify for it... not everyone goes to Uni, only the people who are gifted in the subjects taught at the Uni.
NicoleK at November 20, 2018 10:23 AM
Or those with connections NicoleK. That is the problem with 'free'. If you don't pay you don't get to choose how the money is spent.
Ben at November 20, 2018 11:46 AM
I blame parents, who bought into the notion that every child should go to college. I also really blame them for allowing, and assisting their children to rack up tens of thousands of dollars in student loan debt for a bullshite undergrad degree.
I paid for my daughter's unfunded tuition for her undergrad degree at a private university. After the grants and scholarships she received, I still footed the bill to the tune of about $60k - thank god she finished in 3.5 years. Once she went on to grad school she was on her own. She did take a significant amount of student loans to get her masters as a Physician's Assistant, you know a degree in something that's in high demand. At 3 years post grad she is making $150k a year. And because she works in the "underserved community" she qualifies for loan forgiveness after 10 years.
So to all the idiots that received their degree in French Literature, or Women's Studies - go pound sand. If you weren't smart enough to figure out your job opportunities were going to be severely limited with that degree, you don't deserve a pass on paying off what you owe.
sara at November 20, 2018 11:56 AM
How do you get "tricked into going to college?" You get tricked into playing three-card monte, but that lasts only a few minutes. College lasts four or more years. So, for four years, she was "tricked?"
--Conan
Women are, on the average, much more susceptible to societal pressure and literally all of society, parents, high schools, media push the idea that college is necessary. Also in modern society not going to college is low status, and women are much more susceptible to status games. And the Universities have a lot of sinecure's to provide for so they won't tell you that a women's studies degree is useless. Also liberals, who control mass media, want you to go to college so that you get more liberal indoctrination. This amount of pressure is overwhelming for most women under 25. In a sane society these women would have husbands to guide them down the right path (which is why liberals destroyed the family and told women a non-stop fuck party until your 30 is par for the course).
> It's time to play to win.
I love when people say things like that... As if the world suddenly came to full consciousness in this moment, and nobody ever had in competitive or corrupting ideas heretofore.
--Crid
Well Conservatives have lost every cultural battle for the last 60 years. They have failed to conserve anything. On top of that liberals do play to win. They fight for their side and they acively go out of their way to hurt conservatives. Conservatives meanwhile refuse to hurt their enemies because "much principles" prevet them from playing dirty. That is why it is now time to play to win.
Jewish Cat at November 20, 2018 12:56 PM
Hi Snoop!
Crid at November 20, 2018 1:04 PM
> That is why it is....
You were not misunderstood.
Crid at November 20, 2018 1:05 PM
In a sane society, women would make and be responsible for their own decisions; neither "tricked" nor guided by their husbands.
Conan the Grammarian at November 20, 2018 1:17 PM
In a sane society, women would make and be responsible for their own decisions; neither "tricked" nor guided by their husbands.
--Conan
Good job parroting mainstream feminist dogma from the sixties and seventies. You better get that updated though if you want to be a good boy in the current year. The party line now comrade is that women are superior to men and should make all the decisions.
Men and women are not equal. Most women want and need a man to lead them. Not all women, but most. You can ask your wife's boyfriend to explain it to you if you are confused.
Jewish Cat at November 20, 2018 1:33 PM
I got through college with no debt. My daughter did the same. We would be punished in favor of those who were fools and ran up big debts.
Someone above thinks canceling debt would hurt the universities--but the schools don't hold the debt, the banks do. You don't "cancel" 1.5 trillion bank debt without causing economic collapse--they mean the gov pays it off, canceling the need of the students to pay it off.
I know a girl back the day (40 yrs ago) who majored in french lit. She genuinely felt deceived but she never once seemed to ask herself what she was going to do with it. She was a secretary when I met her. I got a practical degree. heh
cc at November 20, 2018 2:14 PM
The real problem with student loan debt is that it cannot be partially or wholly eliminated in a bankruptcy proceeding. This is by law. The law simply needs to be changed to make student loan debt equal to other forms of debt in bankruptcy proceedings.
But eliminate all the debt? No way in Hell.
mpetrie98 at November 20, 2018 3:15 PM
Sorry I see it completely differently. I don't believe Bernie or Ocasio believe it would be a good idea to happen, but it's a great political tool to beat over the heads of Republicans and the banks while protecting the guilty Universities.
Democrats say, You are in debt for 30 years, blame Republicans for not giving $ to you. Or blame the greedy bankers.It guarantees a voter for 30 years but only if they never actually get it passed.
Republicans are doing the wrong tactic. Going over how idiotic a scheme it is. Nope they got to change the message. Point out the universities as the greedy evil ones that they are. Tuition going up tripple inflation for decades, any other business would be attacked mercilessly for that level of greed. Have the universities cover the loans, then talk about canceling the debt. https://en.wikipedia.org/wiki/List_of_colleges_and_universities_in_the_United_States_by_endowment
The best Republican response to free college should be: "Sure it should be free, many Universities are sitting on HUGE endowments. They aren't in debt like the government or the common people.But they keep on raising their prices at a faster rate than any place else. Let them run for free, till they spend 10% of their endowments. For Princeton even if they got a lousy 2% interest on their endowment. Just the interest could pay all their students tuition forever. Or we could just tax the endowments at a rate lower than the standard business tax."
Joe j at November 20, 2018 3:22 PM
How do you get "tricked into going to college?" You get tricked into playing three-card monte, but that lasts only a few minutes. College lasts four or more years. So, for four years, she was "tricked?" And, unlike the military, you're free to quit at any time.
Wise words from Conan the Grammarian.
"Tricked" is Great-Grandma handing over her banking info in an internet swindle, not Mykaylah or Jaxxten willingly going into hock for a degree which may or may not pay off.
Kevin at November 20, 2018 3:32 PM
The big problem with this proposal is that it sounds like they want to forgive ALL student debt, and this really cannot be the case. I would like to see a more concise proposal that takes into account the amount that has been paid against the loan. I read somewhere about someone who took out a $50,000 loan. The amount they paid over the years was around $70,000 and they still owed about $20,000. (And I may not remember those numbers right, and I don't know how the interest worked or if there were late payment fees involved.) In this case, since the student had paid back an amount equal to the principal and a considerable amount of interest, the remainder should be forgiven. But I wouldn't approve a blanket forgiveness for anyone who hasn't even come close to paying the principal.
Fayd at November 20, 2018 4:24 PM
Today's outstanding student loans are either guaranteed by the government or were made directly by the government.
That means that if you allow those debts to be discharged in bankruptcy - because some idiot got a master's degree in puppetry and cannot find a job that pays enough to cover both debts and living expenses - you're basically giving him a college education paid for by the taxpayers.
You're effectively eliminating the debt at taxpayer expense, making a college education virtually free - the only penalty being a seven-year derog on one's credit that, with time, will probably end up being treated like medical derogs, ignored by loan underwriters.
There seems to be a general consensus that if the student loan is not repaid, banks will take the loss. Most outstanding student loans today were originated by the federal government, most of the rest were guaranteed by it. That means taxpayers will pay off the unpaid loans.
Student loans have been the subject of countless financial and political games over the years:
First, Ted Kennedy proposed that student loans be made an asset on the federal budget (Accounts Receivable) when Gramm-Rudman forced the government to account for estimated default liabilities (Accounts Payable).
Later, taxpayers got handed the Public Service Loan Forgiveness program, backed in the Senate by Ted Kennedy and signed into law by President George W. Bush. It was the first "loan forgiveness" program and was intended to address the low salaries of public sector employees versus the large student debt they amassed to get the advanced degrees the government is so proud of its employees having.
Then, Obama signed into law direct lending (officially putting student loans into the Accounts Receivable bucket) and making student loans direct loans from the federal government (in reality, from taxpayers). The change was projected as a money-maker for the government as students repaid their loans with interest.
All of this means that discharging student loan debt through bankruptcy would effectively be a loan forgiveness program and could cost the taxpayers up to $1.5 trillion.
Conan the Grammarian at November 20, 2018 5:29 PM
"I assume this means they are going to pay me back for the student debt I PAID OFF"
I'm all set to make that a reality.
I had one small loan, only $2500. I paid it off early. However, the loan was sold several times, and the last time, they made a mistake, and mailed the note to me instead of to the purchasing bank. When I paid it off, I demanded the note, and they made excuses. I still have all the documentation.
That sort of honesty on my part is apparently something to punish.
bw1 at November 20, 2018 5:59 PM
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