Poll of the Day > Has anything been done to prevent , another 10k in student loan forgiveness..

(+) Yeah! (+)

...from being needed again? Have heard many others say this, that it will just happen all over again and need to be done again.

No, tutiton reform is needed.

Nope. This whole thing is a disgusting tax on the poor and the responsible.

What is needed is to make all future student loans dischargible in bankruptcy.
That in turn means banks won't be willing to loan out large sums.
That in turn means students won't have a bottomless pit of cash to spend.
That in turn means colleges actually have to slash their admin and facilities spending to make themselves affordable.

But we can't do that, the college industrial complex is too deep in Congress's pockets.

Jen0125 posted...

No, tutiton reform is needed.

This. Student loans are predatory as is and should have an interest rate of 0%. I would also go as far as saying that all public universities should be free. If you are accepted to a public university, it should be free.

GameLord113 posted...

Student loans are predatory as is and should have an interest rate of 0%.

I'd be okay with having an interest rate that would allow them to keep up with inflation, so as to avoid having them be a loss, but government student loans absolutely should not charge interest for the sake of turning a profit. That is, in fact, a tax that explicitly targets the lower and middle classes (those who can't just pay out of pocket for college). Private loans are another matter, since making a profit is their only reason for existing, but if government loans are available that have lower interest rates and cover the costs of most universities (which need to be regulated down in their own right), that competition will keep them from getting out of hand outside of cases where they're needed to pay for more expensive universities (in which case the existence of cheaper alternatives will help to keep them in check and/or encourage those who would have to take on unsustainable debt to go elsewhere).

GameLord113 posted...

This. Student loans are predatory as is and should have an interest rate of 0%. I would also go as far as saying that all public universities should be free. If you are accepted to a public university, it should be free.

I agree with you. I also think that there should be a cap on yearly increase % similar to rent control. These colleges and universities are raising tuition by 25% per year it's absolute greed.

Repubes: Jesus everything!

Jesus: Don't charge interest on loans

Repubes: Wait, that's illegal

Student loans should be like home loans, not way worse than car loans with 7%+ interest per year, with additional penalties/fees and the ability to move any interest over to the principle. THAT needs to be done first, both now, and retroactively.

If you just flat out got rid of the insane interest, most people would not have a problem eventually paying back even the larger student loans (that were to large/expensive mind you but still managable).

Anyway, over 20 years, can pay back 60k, if you are only having 1k interest a year, even working fast food etc, you could pay it off.

But somehow (and you have to look it up to see how the fark they even do this), they are charging over 6k a year interest on a 60k loan and then adding that to the principle, and on top of that charging people fees etc that make it go up even faster.

Yes the underlying costs etc need to be fixed, but first and foremost, convert student loans to a much lower interest rate, prevent capitalizing the interest if payments are being made etc.

You should not be in more dept getting a BA degree then you would buying a home, but currently there are quite a few people who are, and it's only getting worse.

No, but that doesn't make the current loan forgiveness proposal any less beneficial for those receiving it.

streamofthesky posted...

Nope. This whole thing is a disgusting tax on the poor and the responsible.

What is needed is to make all future student loans dischargible in bankruptcy.
That in turn means banks won't be willing to loan out large sums.
That in turn means students won't have a bottomless pit of cash to spend.
That in turn means colleges actually have to slash their admin and facilities spending to make themselves affordable.

But we can't do that, the college industrial complex is too deep in Congress's pockets.

Except all that would happen is colleges would be filled with wealthy idiots. There's more than enough wealthy people to not need loans at all, and the colleges give out full scholarships to students who they actually want using their facilities.

Kyuubi4269 posted...

Except all that would happen is colleges would be filled with wealthy idiots. There's more than enough wealthy people to not need loans at all, and the colleges give out full scholarships to students who they actually want using their facilities.

No, there's not, you're full of shit
Wealth is this country has always been concentrated in the hands of a few, and since Reaganomics it's been the most top-heavy since the gilded age.
Relying on just a handful of super rich kids is not going to fill up a college. They might be able to not change their lavish spending and still break even if they ramped prices up enough, but those prices would have to be obscenely higher than they are even now. Most of the student loan debt is held by the top 40% as it is now. So clearly, even among the best off, it's only a tiny handful that don't "need" loans.

streamofthesky posted...

Nope. This whole thing is a disgusting tax on the poor and the responsible.

What is needed is to make all future student loans dischargible in bankruptcy.
That in turn means banks won't be willing to loan out large sums.
That in turn means students won't have a bottomless pit of cash to spend.
That in turn means colleges actually have to slash their admin and facilities spending to make themselves affordable.

But we can't do that, the college industrial complex is too deep in Congress's pockets.

I agree for the most part, but there's a few problems with that.

Sadly the bankruptcy thing is there for a reason. That was started because a ton of law students kept taking out massive loans, then filing bankruptcy the second they got their degrees to purge their debt.

I think most of the student debt issues could be solved with one simple change. Just make it so you only need to take classes directly related to your major. A massive amount of the cost comes from being forced to pay for a bunch of unrelated filler credits. If you're studying to be a chemist, there is absolutely no reason for you to take an english lit class.

Didn't this latest loan forgiveness also come accompanied by a cap of 5% on student loans?

Ozmose posted...

I agree for the most part, but there's a few problems with that.

Sadly the bankruptcy thing is there for a reason. That was started because a ton of law students kept taking out massive loans, then filing bankruptcy the second they got their degrees to purge their debt.

Well yeah. That's why any change has to be on future loans, the current ones were made on terms where students couldn't just do that. Like I said, it means large loans will never happen and will thus brute force the chain of events that leads to colleges reining in their costs.
I have thought more about it and perhaps a middle path to avoid completely drastic shifts would be best.
Here's my new proposal:
All future loans can be discharged in bankruptcy... 10 years after you receive the last payment (whether due to finishing school or dropping out) IF you've spent those 10 years making at least the minimum required income-based payments (Biden made it 5% now and before it was 10%, I think?). Obviously for any periods where your income was $0, your min. payment would also be $0.
If you failed to keep up on said payments at any point while you had income, then you must wait until you have 10 continuous years of making minimum payments (again, time spent making nothing would count).

I think that is a good compromise where people who legitimately are struggling post-college can shed their debt and not be burdened w/ it for life, while also giving the lenders some protection that students can't just take out a massive loan, get a degree, then be like, "thanks for the money, suckers!" and immediately shirk their responsibility.
It would still mean much tighter lending than before, but wouldn't destroy the system entirely, since almost no 18 year old has the collateral or income to justify a sizable loan and the banks need some sort of protection...

dragon504 posted...

Didn't this latest loan forgiveness also come accompanied by a cap of 5% on student loans?

This can help for now, but remember it's on total income, and before taxes, but most importantly it's not set in stone and it doesn't reduce the interest (meaning if you only pay 5% a year your loan keeps getting larger and larger). That is happening right now even with 10% a year because the 7%+ interest on the total student loans is larger than 10% of alot of peoples actual income (sadly).

5% just basically means you pay another 5% in tax a year because you went to college (currently 10% mind you, it's just proposed to become 5%). For almost half of americans who make somewhere around 15-20$ an hour (or 40k or less a year), that 5% added into social security tax etc, drops them down to under 30k a year total after taxes etc.

Rent most places alone eats up most of that (average of $1200 and in many areas getting a place for that little is a dream now).

But again, that is just the CURRENT amount, and it allows the principal to continue to grow. What is to say a future president won't change it to be 5% of the total debt you have per year, or they will garnish your wages (which is currently a thing already if you don't make payments) for 33% of your income?

It's actually WORSE to make it 5% now if that happens later because you set people up for a debt that can never be paid back, even if they are paying 33% of their net income every year, forcing them into perpetual poverty and making it almost impossible to survive (or pointless to even bother working).

The solution isn't easy, but the first stage should be to control the insane interest rates and stop the debt from continuing to skyrocket, then all debt should be evaluated and reset to a fair amount for the schooling that was recieved. Flat out maximum total debt should be given for straight degrees (IE just the number of classes for an AA, BA, MA etc). Something like 20k for an AA, 40k for a BA and 60k for a Masters would be somewhere around fair, and any debt owed over that should be canceled, include all rediculous interest accrued since the debt was obtained.

Future interest on that debt should be capped to a reasonable amount and not compounded. I'd prefer 1% to be honest even though it doesn't keep up with inflation, because we should invest in educating our citizens, but 2% should prevent a long term loss at least, and even on 60k 2% is managable per year if you are working at all (1.2k a year or 100$ a month).

There are no actual current proposals that will help the majority of people with student loans, and in fact, the one by biden will HURT most long term due to the 5% change, which looks good now, but can end up hurting people with loans over 40k and a salary under 40k worse than the current setup.