This is really sad and appalling. Buy a vote Biden. Ugh. Especially since this loan payoff also applies to students from wealthy families and those who now earn a high income. This policy has nothing to do with what is deserved.
Two of my recently graduated nephews voted for Biden in part because of his promise to pay off their student loans despite the fact the majority of their college tuition and other costs were already reduced to a minimum because of low income and personal life situations.
In contrast, I know many working class young people who lacked the financial resources or had other responsiblities that precluded them from the luxury of not working while in school.
I took out student loans and worked partd-tme through out the seven years it took me to get my Bachelor's degree. I don't want to ride a high horse too far because yes, costs were far more reasonable back then, and I understand the debt burden is much higher as costs have gone haywire in the decades since I attended college. However, as Senator Scott noted, this approach does nothing to scrutinize or control the runaway costs of college. I find it puzzling to look at the relatively low increase in teaching salaries versus the huge increase in both the number of and salaries of bureaucratic administrators. Even public unversities now award huge compensation packages to top administrators as if they are pay for themselves with fund raisisng activities. It also seems far more is spent in assuring luxurious surroundings for students. Even course bulletins have become ludicrously glossy and expendsive.
Foreign students are given preference to a number of limited slots because they pay higher tuition (for all 4 years? or not). but their higher tuition really only reflect operating cost, not the capital costs needed to increase capacity. And in reality public universities are still heavily subsidized by generarl taxpayer. And when limited slots are granted to foreign students, middle and lower class students must often go out of state and pay even higher out of state tuition costs to get a spot at a lesser college. So we have a subsidy to wealthy foreign students, and it turns out we've also greatly subsidized the economies of India and China as the brain drain back to these countries comes at the expense of US students and our economy. (Yes we've had some amazing and talented immigrants who start out as foreign students, but why do we have to subsidize wealthy students?)
These trends are even more irritating since there is no evidence that the quality of education has improved one iota. All I've noticed is the rise and push for an increasingly poisonous, intolerant far left ideology followed graduates emerging with a sense of elitist entitlement. And of course Biden is rewarding that...gee..because they are so "special"?.
I could support a partial student loan forgiveness program if lower or middle income graduates worked several years in a useful capacity to give back to their community. But I don't see this as part of the package.
The other loss here is that it is actually important for students pay for at least some of their own education. With at least some skin in the game they are more likely to apply themselves and value their education. As someone who worked & paid for the majority of my own college expenses, a student is far more likely to make sure they get value for the money spent on their education and to be serious about their studies. Encouraging responsiblity should be an education goal, yes?
Meanwhile I think about the folks who work daily just above minimum wage having to pay more of their income so Biden can get votes. All I feel is complete disgust with this administration.
This article is why I love Common Sense so much. As a liberal, I read Ro Khanna's piece first, then Tim Scott's. Although both pieces had merit, I tend to agree more with Tim Scott - who'd a thunk it? :-)
In a twist of logic, this is ironically true but the real villains here are the colleges. They entice students with lavish amenities, then encourage loans from third parties that encumber the students to pay themselves. All that to eventually grant degrees that demonstrate little in the way of marketable skills. What a system!
I concur with Senator Scott. Mr. Biden is simply buying votes, IMO. Crass. Corrupt. Contemptable.
If one accepts the premise the kind of work America requires needs post-secondary education, then target the skills, strategically (STEM, obviously) and issue aptitude-verified grants, with proof of satisfactory progress for annual re-ups.
Enforce truth-in-lending practices for all post-secondary certifications and degrees based on market values.
Get the federal government out of the lending business; return it to the private sector, including scenarios where a university must put some of its endowments at risk.
More fundamentally, move all elementary and secondary education to school choice, and improve the quality of college-bound students.
"You can’t cancel debt. Someone always has to pay."
No. When interest raters are usurious, after some point, most debtors are simply buried by oppressive payment demands to creditors who grow wealthier with every passing payment deadline, often to the tune of 200% or more of the original loan principal. That debt service is often enforced by penalties for the merest of delays, and the coercive threat of garnishment.
I learned in high school economics in the early 1970s (do public schools even teach that any more?) that annual interest rates over 10% basically amount to usury. The fact that a Supreme Court ruling in the late 1970s basically legalized loan practices formerly held to be illegal loan sharking in many states doesn't confer ethical legitimacy on the practice.
Debt forgiveness has a long tradition. Societies with an interest in justice make provision for debt jubilees, so that they don't bury their own people in indentured servitude. More practically, the wise leaders understand the practical reality of costs to the general welfare and the common good; provisions are made for periodic debt resets, because they realize that otherwise individual, families, communities- and eventually entire societies- fall apart. Whereas stupid leaders deny that there is such a thing as general welfare or the common good, or even commonsense ethical fairness.
Debt forgiveness Jubilee is not some exercise in command economy "leveling" or "enforced equality." The practice derives from the moral and ethical traditions found in societies that seek to uphold the principle that the Strong must not oppress the Weak. Debt jubilee doesn't impoverish the wealthy. Nor does it enrich the poor; it simply preserves them from a lifetime of being buried economically.
I'm fine with questioning the particular priorities of the Biden college debt forgiveness plan. In my opinion, there's a lot there to disagree with. But as for the meanness of insisting that "a debt is a debt" as if there were some lofty principle present, forget that.
My post was directed at the statement I quoted from the subhead of Tim Scott's essay- the statement that led it off. It was stated as a postulate, and one that I think is invalid.
But, to address the specific points of your comment: I agree that Federal student loans are not the first place to address, in a debt jubilee effort. Consumer debt and medical debt is a much more serious problem. But calling Federal student loans "the cheapest debt you'll ever encounter" is either inaccurate or ominous. Your statements implies that all the other credit interest rates will always be even higher than an annual rate of 5%.
I haven't yet found much relevant information on the details of exactly how the Federal loan forgiveness is to be exercised in this case: is the Federal government (the taxpayers) going to make good on debts owed to the privately owned banks, or are the lending institutions simply being ordered to write it off? The US Federal government doesn't have a National Bank, as a lending institution. There are always private interlocutors, yes?
Just once in my lifetime, I'd like to see US loaning institutions come to a voluntary agreement to cancel all debts owed by US citizens who have paid 200% of the original loan principal. Without any requirement for government to mandate such a move.
You're the one that's out of touch. Markets need to serve human purposes. Not the other way around.
One needn't be a Leftist ideologue in order to agree with that general statement of principle. But I'd venture that the only basis for disagreeing with it is dogmatic allegiance to Rightist economic Ideology.
All ideologies are head games- they have the power to construct all sorts of abstractions, idealizations, and hypothetical examples to justify their pretensions to Final Wisdom. Economic reality is empirical, not a set of conditions to be molded by a the ironclad precepts of a Theory of Everything.
Limits on borrowing without "some skin in the game" will be the only way to stop this runaway train. Also make schools lower costs akin to their Endowments. Seem's reasonable? Senator Scott needs to set Congress on a focus to solve this "Accountability " problem.
I am with Senator Scott. I read Ro Khanna’s piece too and respectfully totally disagree with him. This is such an obvious bribe and judging from multiple college stadiums chanting FJB this weekend! The beneficiaries see right through this too. Politically this is up there with Joe Biden calling half the Country ‘semi-fascist’, whatever that means
This is really sad and appalling. Buy a vote Biden. Ugh. Especially since this loan payoff also applies to students from wealthy families and those who now earn a high income. This policy has nothing to do with what is deserved.
Two of my recently graduated nephews voted for Biden in part because of his promise to pay off their student loans despite the fact the majority of their college tuition and other costs were already reduced to a minimum because of low income and personal life situations.
In contrast, I know many working class young people who lacked the financial resources or had other responsiblities that precluded them from the luxury of not working while in school.
I took out student loans and worked partd-tme through out the seven years it took me to get my Bachelor's degree. I don't want to ride a high horse too far because yes, costs were far more reasonable back then, and I understand the debt burden is much higher as costs have gone haywire in the decades since I attended college. However, as Senator Scott noted, this approach does nothing to scrutinize or control the runaway costs of college. I find it puzzling to look at the relatively low increase in teaching salaries versus the huge increase in both the number of and salaries of bureaucratic administrators. Even public unversities now award huge compensation packages to top administrators as if they are pay for themselves with fund raisisng activities. It also seems far more is spent in assuring luxurious surroundings for students. Even course bulletins have become ludicrously glossy and expendsive.
Foreign students are given preference to a number of limited slots because they pay higher tuition (for all 4 years? or not). but their higher tuition really only reflect operating cost, not the capital costs needed to increase capacity. And in reality public universities are still heavily subsidized by generarl taxpayer. And when limited slots are granted to foreign students, middle and lower class students must often go out of state and pay even higher out of state tuition costs to get a spot at a lesser college. So we have a subsidy to wealthy foreign students, and it turns out we've also greatly subsidized the economies of India and China as the brain drain back to these countries comes at the expense of US students and our economy. (Yes we've had some amazing and talented immigrants who start out as foreign students, but why do we have to subsidize wealthy students?)
These trends are even more irritating since there is no evidence that the quality of education has improved one iota. All I've noticed is the rise and push for an increasingly poisonous, intolerant far left ideology followed graduates emerging with a sense of elitist entitlement. And of course Biden is rewarding that...gee..because they are so "special"?.
I could support a partial student loan forgiveness program if lower or middle income graduates worked several years in a useful capacity to give back to their community. But I don't see this as part of the package.
The other loss here is that it is actually important for students pay for at least some of their own education. With at least some skin in the game they are more likely to apply themselves and value their education. As someone who worked & paid for the majority of my own college expenses, a student is far more likely to make sure they get value for the money spent on their education and to be serious about their studies. Encouraging responsiblity should be an education goal, yes?
Meanwhile I think about the folks who work daily just above minimum wage having to pay more of their income so Biden can get votes. All I feel is complete disgust with this administration.
This article is why I love Common Sense so much. As a liberal, I read Ro Khanna's piece first, then Tim Scott's. Although both pieces had merit, I tend to agree more with Tim Scott - who'd a thunk it? :-)
Keep up good work BW!
The poor don't pay income tax--they receive earned income tax credits. How is this plan any kind of a "burden" on them? It won't cost them a cent. In 2021, 57% of people paid ZERO federal income tax (https://www.cnbc.com/2022/03/25/57percent-of-us-households-paid-no-federal-income-tax-in-2021-study.html). It sounds like they're already being heavily subsidized.
In a twist of logic, this is ironically true but the real villains here are the colleges. They entice students with lavish amenities, then encourage loans from third parties that encumber the students to pay themselves. All that to eventually grant degrees that demonstrate little in the way of marketable skills. What a system!
I concur with Senator Scott. Mr. Biden is simply buying votes, IMO. Crass. Corrupt. Contemptable.
If one accepts the premise the kind of work America requires needs post-secondary education, then target the skills, strategically (STEM, obviously) and issue aptitude-verified grants, with proof of satisfactory progress for annual re-ups.
Enforce truth-in-lending practices for all post-secondary certifications and degrees based on market values.
Get the federal government out of the lending business; return it to the private sector, including scenarios where a university must put some of its endowments at risk.
More fundamentally, move all elementary and secondary education to school choice, and improve the quality of college-bound students.
"You can’t cancel debt. Someone always has to pay."
No. When interest raters are usurious, after some point, most debtors are simply buried by oppressive payment demands to creditors who grow wealthier with every passing payment deadline, often to the tune of 200% or more of the original loan principal. That debt service is often enforced by penalties for the merest of delays, and the coercive threat of garnishment.
I learned in high school economics in the early 1970s (do public schools even teach that any more?) that annual interest rates over 10% basically amount to usury. The fact that a Supreme Court ruling in the late 1970s basically legalized loan practices formerly held to be illegal loan sharking in many states doesn't confer ethical legitimacy on the practice.
Debt forgiveness has a long tradition. Societies with an interest in justice make provision for debt jubilees, so that they don't bury their own people in indentured servitude. More practically, the wise leaders understand the practical reality of costs to the general welfare and the common good; provisions are made for periodic debt resets, because they realize that otherwise individual, families, communities- and eventually entire societies- fall apart. Whereas stupid leaders deny that there is such a thing as general welfare or the common good, or even commonsense ethical fairness.
Debt forgiveness Jubilee is not some exercise in command economy "leveling" or "enforced equality." The practice derives from the moral and ethical traditions found in societies that seek to uphold the principle that the Strong must not oppress the Weak. Debt jubilee doesn't impoverish the wealthy. Nor does it enrich the poor; it simply preserves them from a lifetime of being buried economically.
I'm fine with questioning the particular priorities of the Biden college debt forgiveness plan. In my opinion, there's a lot there to disagree with. But as for the meanness of insisting that "a debt is a debt" as if there were some lofty principle present, forget that.
Student loans are some of the cheapest debt you'll ever encounter, and unsecured to boot, arguably the antithesis of usury rather than its paragon.
My post was directed at the statement I quoted from the subhead of Tim Scott's essay- the statement that led it off. It was stated as a postulate, and one that I think is invalid.
But, to address the specific points of your comment: I agree that Federal student loans are not the first place to address, in a debt jubilee effort. Consumer debt and medical debt is a much more serious problem. But calling Federal student loans "the cheapest debt you'll ever encounter" is either inaccurate or ominous. Your statements implies that all the other credit interest rates will always be even higher than an annual rate of 5%.
A link to the array of rates charged for student debt, which vary depending on undergrad or advanced degree enrollment, and also depending on whether Federally backed or entirely private: https://www.bankrate.com/loans/student-loans/current-interest-rates/
Relevant (if overly general) ballpark figures for average income earned by graduates, vs. amount owed in loans, and other data, such as some details on the types of loans available https://www.nytimes.com/2019/09/27/your-money/student-debt-what-to-do.html
More detailed figures than the NYTimes knows how to report, in regard to student loans https://www.businessinsider.com/personal-finance/average-student-loan-debt?op=1
(56% of student debt is owed by households with graduate degrees, who are around 25% of the borrowers.)
plug in and play: https://www.thecalculatorsite.com/finance/calculators/loan-payoff-calculator.php
I haven't yet found much relevant information on the details of exactly how the Federal loan forgiveness is to be exercised in this case: is the Federal government (the taxpayers) going to make good on debts owed to the privately owned banks, or are the lending institutions simply being ordered to write it off? The US Federal government doesn't have a National Bank, as a lending institution. There are always private interlocutors, yes?
Just once in my lifetime, I'd like to see US loaning institutions come to a voluntary agreement to cancel all debts owed by US citizens who have paid 200% of the original loan principal. Without any requirement for government to mandate such a move.
Most Americans underestimate just how out of touch with reality the representative Leftist is.
Of course, most Americans are right there with them.
You're the one that's out of touch. Markets need to serve human purposes. Not the other way around.
One needn't be a Leftist ideologue in order to agree with that general statement of principle. But I'd venture that the only basis for disagreeing with it is dogmatic allegiance to Rightist economic Ideology.
All ideologies are head games- they have the power to construct all sorts of abstractions, idealizations, and hypothetical examples to justify their pretensions to Final Wisdom. Economic reality is empirical, not a set of conditions to be molded by a the ironclad precepts of a Theory of Everything.
I really hope you don't think that anything you just wrote was intelligent.
Limits on borrowing without "some skin in the game" will be the only way to stop this runaway train. Also make schools lower costs akin to their Endowments. Seem's reasonable? Senator Scott needs to set Congress on a focus to solve this "Accountability " problem.
I am with Senator Scott. I read Ro Khanna’s piece too and respectfully totally disagree with him. This is such an obvious bribe and judging from multiple college stadiums chanting FJB this weekend! The beneficiaries see right through this too. Politically this is up there with Joe Biden calling half the Country ‘semi-fascist’, whatever that means