Why Student-Loan Forgiveness Comes With Economic and Political Risks | WSJ
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- Опубліковано 17 жов 2024
- The Biden administration is nearing a decision on student-loan forgiveness, an issue that could affect millions of Americans and reverberate in the coming midterm elections. Here are some of the key challenges complicating the final decision.
Illustration: Ryan Trefes
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#StudentLoanDebt #StudentLoanForgiveness #WSJ
Isn't college price inflation the problem? College hasn't always been super expensive
Yes, but college is effectively a government funded jobs program.
Yup and they’re making studnets pay for things like new buildings, sports teams, and recreational centers like lazy river pools at some more grandiose for profit colleges
Colleges charge the maximum loan amount. College prices are directly the result of easy loans from the government.
@@benjamindover4337 tell the colleges to lower the prices, rather than the tax payers having to pay the bills.
@@jordanfrielingsdorf4761 let's just cancel colleges. it's useless. people can learn the skills on their own anyways. we only need medical school and nothing else. why do i need to go to college for mechanical engineering or gender studies? i can learn it on my own.
The entire system needs to be overhauled. Ever since the existence of student loans, it's just given colleges more of a reason to increase the price. Income Share Agreements are becoming more popular.
Bitcoin fixes this
How would you want to overhaul this if you’re king for a day?
That’s not an overhaul, that’s almost worse than student loans. An overhaul is free university for the public good
Dismantled then start from a clean slate.
@Sean Downey Counter argument to that - part of the reason those careers are so profitable is because there are fewer people who do them. If we paid for and therefore flooded the market with those degrees, wouldn't the degree lose its value in the same way that Arts and IT degrees have?
It’s a principle agent problem, simple as that. The universities have no incentive to keep prices down because of the loans, the people giving out the loans always get their money back and young people are told college is the only path to the middle class. Nobody has the interests aligned.
This entire statement needs to be on every headline in every media outlet
Yah, I feel like this is karma for all of the older generations who said college was the way to go.
I really agree with this statement, phrased perfectly
Before debt cancellation, what really needs to happen is the government needs to heavily regulate universities by putting a cap on tuition (the public universities at least; not much can be done with those who decide to go to private universities). Furthermore, they need to punish predatory loan companies that charge extremely high interest rates for students and promote income based repayment plans more. Finally, there needs to be some mandatory elective high schoolers should have to take so that they are well aware of what they are signing up for should they decide to attend university and sadly that should include statistics on the majors and degrees that will be able to pay off those loans. Cancelling student loan debt is just putting a band aid on a gunshot wound; until we remedy the root of the problem, nothing will change. As much as I want student debt cancelled even though I have none myself, I would not hold my breath on it happening anytime soon.
Instsll student unions and empower them so as to keep the institution and administration in check.
The government IS the predatory lender.
The interest rates are to keep the program viable by accounting for those that don’t pay back their loans.
Schools have no skin in the game. Make them co-sign these loans instead of the taxpayers. If the loans aren’t repaid, the schools will be forced to adjust accordingly.
Isnt it the gov. Giving out the loans? For like ten years now?
Well you are right about those loan companies.. but consider.. at least during my time (when I returned to University - 1997), there has to be laws, and STRONG ONES, ENFORCEFUL ONES that disallow companies - (again during my time) the CREDIT CARD/some Auto Loan companies from being on Campus PUSING students to gain said card(s) or debt and qualifying them ONLY one the monies they are receiving from Grants or.. said Student Loans... I can tell ya, I saw many a student sign up quickly, seeing the Easy Cash available.
Well informative, how old r u?
Tuiton is so high in the first place because institutions saw the introduction of student loans as an excuse to endlessly raise fees!
Exactly. This is the point that people just can't seem to understand. If the government stopped guaranteeing college loans, the price of schooling would drop severly in a hearbeat.
Go further to the root of the problem: privatisation.
Well it IS an excuse to endlessly raise fees, you can't really blame a company for abusing something that's meant to be abused in the first place. The blame for the stupid system is on the legislators that set up that stupid system.
Well, at least this is my opinion 👍
@@josesantiago1721 free college tuition like most European countries
@Swarmpope market conditions. Policy conditions.
The govt had no problem forgiving 90% of the $800 Billion PPE loans. $600 Billion of which, has never reached the intended people(the workers) but has been slipped into the pockets of owners 🙄
2 wrongs don't...,
And politicians/mainstream media never talk about price gouging by corporations.
@Ny W When you realise WSJ is owned by Murdoch Newscorp then you begin realising they’re not a very reliable source, least of all on issues which have arguments divided by partisanship.
Lol it only hurts the economy when it helps the poor/general public 😂
That was a stupid idea too.
I don't have a problem with paying back every penny I borrowed. It's the interest that is killing borrowers. I'm paying interest on interest. Cancel interest or make it 1% and that solves the problem for so many.
I completely agree. I would have paid off my loan 5 years after graduation if the interest rate was low or zero.
I agree for zero interest.
Ever heard of the concentrated benefit vs diffused cost theory?
This would be the most logical plan. Pay what you borrowed. We shouldn’t be paying what interest is accumulated when people have been making crazy payments for years.
^THIS!!! ALL THIS!!
Remember, there are economic risks to student loan forgiveness, but we'll disregard the economic risks when it comes to bailing out big corporations. America the Great!
Or billions for military give me a break
Well if you are talking about 2008 frankly there wasnt an other option. And if you mean the pandemic stimulus for corporations I would say that it could have been better managed but it was also completely necessary. In both cases they saved the economy from deeper recessions.
Lol we bailout corporations to save our economy from total collapse.
We're thinking about bailing out tuition borrowers because...they're whining a lot on Twitter? Because a lot of them are people of color? Idk I've not heard any compelling arguments in favor of it.
@@gyurhanaziz7676 you know this corporations gave themselves huge bonuses right? not to mention they had for many years been sending jobs over seas which added to the recession.
@@robertt.2050 I am not defending the corporations. In fact they were the ones responsible for 2008 but what else could we do. If we didn't bail them out the results were going to be more catastrophic.
How about just make college affordable for future generations…
Most of our right wing government: that is socialism! (yes we have a few actual left people still right wing)
Also the government: how do we solve all these issues or make it so they are livable?
Every common sense person: perhaps educate future generations to expand their knowledge that may one day solve these issues and accept education is essential for any society.
Also the government: but it’s socialism…
Community college is already very affordable.
That should also happen but what about the countless millions drowning in student loan debt and they can’t pay it back because their degree didn’t work out and bankruptcy isn’t an option?
Tell the US government stop issuing students loan and college will be affordable
@@mikehertz6507 some people are too prideful to go to one.
Speculation: Student loans will NEVER get canceled and college tuition will CONTINUE to rise.
Status quo
That's always a safe bet
Yeah, I don’t think Dems have any good ideas anymore and are begging to be voated out!
Solution: STOP GOING TO PRIVATE COLLEGES. Go your state schools! They are just as good and you have partially paid for them already through your tax dollars
No honey he’ll do something by August 31 st. Mid term election ya know.
And we’ll never pay it back 🤷🏾♂️
The problem is there is no demand for these students once they graduate to be able to pay off these debts. Like I never required student debt and I paid 100 thousands to a school that was supposed to help me get a job. Frankly I believe school's should be incentivized get their students jobs.
Now apply this to PPE loans
@Beyond Tribalism now when did you graduate what was your field of study
@Beyond Tribalism very good profession especially in times of high commodity prices but they are litterally 1000s of fields of study. Like I my self decided to specialize in finance but I graduated right at the time of the pandemic. A career that I thought was solid turn into dust before my eyes. Now I'm lucky I made some smart investments and had a family to support me. But I spent months searching for work and got nowhere and the jobs I did get were either scams or basically minimum wage. It took a massive tole out of me and I never had debt. Most are not that lucky.
There you go
Or the college only gets there full amount once a student get a job in there field
It's actually obscene how much students are paying for their education while simultaneously the professors who are actually teaching them are paid so precious little for our labor....it seems this current set-up is really not working for anyone who is involved in the actual process of education from either side...
Qui bono
Applying bandaids when the whole system needs an overhaul
well it is the democrats
Graduate high school and put on your resume that you went to college. I did it and they never checked.
Starting early is the best way of getting ahead to build wealth, investing remains a priority. I learnt from my last year's experience, i am able to build a suitable life because I invested early ahead this time. I pray that anyone who reads this will be successful in life, 🙏🙏🙏
I urge everyone to start somewhere now no matter how small, this is literally the time for that, forget material things, don't get tempted,i became more better the moment i realized this.
Yeah investment is the key to sustainaning your financial longevity but venturing into any legitimate investment without a proper guidance of an expert can lead to a greater loss too
Exactly and what kind of legitimate investment can someone do with this recent economy turndown
For me Fo rex trad ing is really profitable, investing in it now will be the wisest thing to do especially with the current rise in bit coin
Yeah for sure, honestly I earned 62,800 dollars within 6days of trading in crypto.
No political risks with shoveling credits to billionaires, but forgiving $10,000 in debt to students is risky? Wow.
If you incur a debt, pay it back yourself.
One wrong, no matter how big, doesn't excuse another.
Universities hike up tuition costs cause they can get away with it. The tuition for the school I went to went up by six grand from when I was a freshman to when I graduated and they still kept increasing it even after I left. And where did this money go? Well not to the students, every year people talked about how their programs were getting cut.
I saw massive constructions (sport field, more buildings) in my university after I graduated. Also the money could go into research funding, salary. Honestly, university is still a business.
Interesting that we can send billions of dollars aid to the country of Ukraine (bipartisan) and no one is screaming about inflation..but can’t use that same money to help improve the lives of American citizens to free them up to participate in the economy without mountains of educational debt that can’t even be discharged in bankruptcy🙄.
Cost to support Ukraine (a country at war in which hundreds are dying every day): $50bn
Cost to cancel $10K of student debt for people with college degrees, who already make more than the average person: $321bn
Cost to cancel ALL student debt (mostly for doctors & lawyers with expensive & lucrative 8 year degrees): $1,600bn
Ukraine war = existential threat to American hegemony. Student loans = not.
@@derpmansderpyskin the Ukrainian president just stated he needs $750 billion for this entire war. Our military budget is over $1 trillion. I have no idea what your point is.
@@CollectivelyEzra That $750bn is the cost of recovery, not the cost to win the war. Our military budget is $740bn, not $1tn.
My point is that student loan forgiveness is a waste of money and we shouldn't do it.
@Gasse Jutube That's so wrong, the U.S. spends about $38bn a year on foreign aid. I have no idea where you got the "half a trillion" number from.
As someone who is fresh out of college, I definitely regret taking out loans and my degree isn't doing me ANY favors. The fact that 18 year olds are given predatory loans before they can even buy a bottle of wine is just sick
What degree? I am a college student looking into loans
Blame your parents, not the system. Your parents should have taught you along the way about debt and how the world works.
You should do is teach english overseas
That's what I did for 20 years.I'm almost done paying off my student loans
I couldn't pay it off fast Because I have health issues
If you have good health. You could have it.
Paid off in 3 to 5 years.
Just consolidate your loans.
Make sure you watch a lot of videos on how to teach students.
Leaving the country and paying off My student knows that way was the best thing I ever did.
My final payment is probably going to be in fourteen months.
Go to japan go to korea go to taiwan.
You'll need to have an fbi background check.
You'll have to notarize your degree.
You can apply for Work visa Through the embassy
It's really a great way to pay back your debt.
Cost of living is lower than in US
They'll provide.
Housing health insurance
Please think about it for those of you who are just graduating
Thank you for explaining this in a non partisan way. Tired of all these partisan reporting blaming the left and right.
I’m left handed ooo scary
The entire segment screamed Democratic. I can’t believe you couldn’t tell.
Honestly the government needs to regulate colleges (and all higher education). The amount they charge is insanely high. Including the books etc etc
You are right.. they won't, but.. that is if you are a native born in the US of A. If you are an illegal person.. GOSH, "Here is your FREE EDUCATION" Welcome to California!
The government can do that.
There are eligibility requirements for universities to be able to receive federal loans.
The eligibility can be changed to where universities are forced to charge tuition that's a narrow band around the median price.
Colleges do not determine price of books.
The decision has long since been made. The final cancellation amount for federal student loans is $0
The Wealthy: We need tax cuts!
The Government: DO IT!!!!
Everyday Americans: We need help too!
The Government: There are logistical issues and maybe inflation. Idk man.
it's simple... if Biden doesn't deliver on his promise, 40 million people will not vote for him again in two years, or this November. That is the single most important issue for millions.
If Biden does overstep and cancel by executive order, the other 308M voters who the debt will then be transferred to will then not vote for him.
Yep
On telegram
I love how all of a sudden inflation is "a concern" with Student Loan Forgiveness. Why was inflation not "a concern" back when Covid started and The U.S. Federal Reserve helped many (especially, Large Cap) corporations? Why wasn't it taken into account back then?
I really hope that they sign the $10,000 Student Loan Forgiveness bill. For many, that's exactly what they need for taking out a mortgage to purchase a home.
Bingo
You’re ask why is inflation a concern when it’s higher than target and not a concern when it was at/below target?
But if everyone gets $10k then the cost of a down payment will rise to $50k... That's how inflation works.
@@saahiliyer11 I don't know if you have watched the video fully but @ 2:12 they state "Eliminating all Federal student debt loan could raise inflation by .37 to 0.5 percentage points (according to a research by The Committee for a Responsible Federal Budget). In other words, eliminating all federal student loan debts will virtually not effect inflation; it will not cause inflation to rise.
That will just increase inflation.
why not eliminate compound interest for these loans? a flat interest rate return with a total price return (much like buying a car, with no missed payments).
How about 0% interest rate ? however greed is the reason why 🤦🏻♂️
Exodus 22:25
25 t“If you lend money to any of my people with you who is poor, you shall not be like a moneylender to him, and you shall not exact interest from him.
you can get "student loans" (its not really a loan) with 0% interest in germany for rent eg.
@@curiouspeople6441 maybe because it’s not the taxpayers job to pay for college.
Here are some ways to fix the system, some of which they already have started.
1) Remove all borrowers from default (this is going to happen).
2) Across the board changes to interest capitalization. Right now, they are talking about minimal changes. That's not good enough. Interest capitalization needs to be removed from student loans completely. In addition, all existing student loans should be reviewed for the amount that was originally taken out, the total amount paid so far, and the amount currently due. If the individual has paid back 1.5X what they took out, any remaining debt is completely cleared. So if they had 20K worth of loans, and have paid 30K, the remainder of the debt is canceled.
3) When a borrower goes into default, require them to make 10 payments on time, then they are removed from default. The way the system currently works is that a defaulting borrower not only has their wages garnished but they are expected to pay 10 monthly payments on top of that. That makes it impossible to get out of default.
4) Set up a system where a borrower's income is automatically grabbed from their tax returns, and they are automatically entered into an income-based repayment plan.
5) Allow student loans to be discharged in bankruptcy. It's currently absurd that someone can have a debt that there is no way they can pay off in their life, yet have no way to discharge the debt.
6) At age 65 all student loan debt an individual has is automatically discharged.
The only reason you can get these loans is because you can't default if you could no would loan you that money
Just make it all government loans. Say, 3% interest, starting after you graduate (up to 10 years, to account for PhDs). 2% to match inflation, 1% to pay for admin fees. Done. Taxpayer money that invests in future taxpayers.
@@katekkllklllkkk9665 when I was 18, the only loans I was offered were private ones with 12.5+ percent rates. Bleh.
ALL Loans should be canceled PERIOD, especially if there is NO HOPE EVER that they can be repaid. I know, I have 223, 000, and that amount will only keep going up - given the interest rate(s). OH WELL. ... Frankly, I do not care anymore.
@@wolfstar_productions that punishes those who didn’t go to school, went to cheaper options, or those who ate rice and beans for years to pay back their loans.
$230k? That’s not bad. My original loan estimate was over $400k at graduation if I went to my dream school (8 years, assume only 1 part time job during school). I ended up doing state school (with multiple jobs and scholarships). No debt upon graduation. Though to be honest, I’d gladly take the $70k loan if it meant I didn’t have to get my moms life insurance money, so….
We could easily solve this with free college. It worked in Germany, Sweden, Norway, The Czech Republic, France, Iceland, Luxembourg.
*It can't be that hard to figure out.*
Apparently for the U.S. it is 🙄. Why would they ever give us anything for free? I wish
It means HIGHER TAXES...
@@wolfstar_productions you don't need higher taxes. Taxes are used to create a demand for USA currency not fund the federal government.
The US does have free college though, they're community colleges.
PEOPLE CRY, “MY BODY MY CHOICE, WELL I SAY “YOUR STUDENT LOAN, YOUR PAYMENTS!
"... millions of people would have to verify their income..."
Millions of people already verify their income every year when they file their taxes. If it isn't a hardship for filing taxes then it isn't a hardship for getting tens of thousands of dollars of student debt forgiven. This is a ridiculous argument against student debt forgiveness.
As all issues of revenue must originate in the House of Representatives, Biden may in fact not have the authority to forgive student debt with the stroke of his pen. If you are a student with a lot of debt then vote for _Democrats_ in congressional elections.
If you are an investor who holds a large quantity of debt backed securities then you knew from the outset it was a high risk investment, and after 2008 if you didn't know that then you're a fool.
Debt backed securities have been around for a long time and will continue to be there. Punishing investors for buying debt backed securities is not the solution. Also, we have already realized that there's a domino effect when it comes to financial markets. While they got the right idea to forgive some debt for people who were wronged by loan servicing firms (govt. backed subsidies were not informed for users), they are clearly going about in a manner which will draw wrath of half of the nation.
It's the WSJ let's just acknowledge they would obviously have a certain level of bias and chose to represent things in a very specific way. I find it shocking that they would pretend paperwork would be required when it can be instantly electronically transferred from the IRS similar to FAFSA... Also the thought of being worried about the financial protection of investors of a predatory industry is beyond me.
the department of education actually holds control over student loans, so the house shouldnt be playing a part here.
@@prestonlee2842 On the contrary. The House holds the federal purse strings. If the House issues a mandate and allocates funds for student debt relief then the DOE will have no choice but follow it.
@Swarmpope Any debt backed security is high risk.
I still don't understand why Americans have to pay for higher education. It should be free like "congratulations for not getting shot in school, here go earn a post secondary degree". Living in Europe, and hearing Americans still to this day say America is the best country on earth despite having no free healthcare, education, no parental leave, no paid vacation (or something lie 2 weeks).... *eye roll in European citizenship
This doesn't really explain why way more Europeans move to the US for school than the other way around.
You get upset when Americans claim their country is the greatest, because you know we're the greatest :)
Why not just force the schools to refund the overpayment?
what overpayment?
Didn’t the students agree to the “overpayment” when they signed? 😑 just saying
What makes you think that schools have funds? They take in money. They spend it on salaries and facilities.
@@richdobbs6595 no, private universities, especially the ones that have high fees, have large endowment funds, it's publically disclosed and well known. A small percentage of student fees goes to covering salaries and facilities, the bulk goes into the funds for investment and capital gains.
What... overpayment? Please return from the Land of OZ and let us know.
Y’all be screaming “ my body, my choice” well to that I say “ your loan, your payment”
“Cancelling ALL debt would raise inflation by 0.3-0.5%” I’m shocked you fail to realize how NEGLIGIBLE that is on the current scale 🤯
BULLSH*T...
Why stop at student loan? How about medical-related debt forgiveness? Or home mortgage?
Exactly, i want my car loan paid off.
The right thing to do is cancel the interest on these expensive loans. Canceling all the debt isn’t going to solve these issues for people who had the opportunity to go to school but didn’t because of the financial toll it would bring. Military and other non traditional routes were taken to afford school but cancelling these loans all together would diminish the benefits earn by those who served. Something to think about.
The right thing is to have the same options corporations have like bankruptcy.
Why people with student loans have to payback every penny but corporations can file for bankruptcy.
50 billion airline bailout 2020 (tax money)... One example of personal responsibility vs corporate welfare.
FYI: I do not have student loans.
@@Daniel-wp8ki and do you agree that they will sell your house, car etc so they can get the money to vover your debt?
Perhaps adjust the rules for college funding so they aren’t incentivized to build these massive sports stadiums
Wouldn't solve the problem rather exaggerate it. Problem started when government started giving lot of credit which allowed colleges to ramp up fees.
7 minutes and 46 seconds of animations and graphs that explain how my loans won’t be forgiven lol.
To assume that forgiving some student loans now may make future borrowers automatically expect to be bailed out seems to be a slippery slope boogeyman the economists are pushing. If I catch a break now, there's no way I'd be inclined to take out more loans and get back in that mess. I'm rather unimpressed with that argument from the video.
Apart from debt forgiveness why doesn’t the Federal gov fix the fees of public institutions which receive government money ? That will ensure education remains affordable for all.
Having never taken student loans for myself, my wife (we both have Masters) or our two daughters who have graduated from college you can guess where we stand on this issue. One thing that keeps getting ignored in the comments is that there is NOTHING in the Student Loan program preventing the students from spending the money on anything (trips to Cancun, designer hand bags, drugs) they want as long as they are registered (paid the registration) for school. For example, a friend of our older daughter went to a UC (University of California) school like our daughter did and owed $106K at graduation. Tuition was $14K/year. What did that other $58K get spent on? We love that girl as a close friend of the family but let's be straight here. She went on vacations, never worked while in school like our daughter did, threw a huge graduation party where she rented a Duck Boat for 30 people (we drove our daughter down to the party and waited til it was over to drive her home as we didn't want her driving after drinking) and her degree was in International Studies. She got a job with an NGO after college for $15/hr in NYC. Uuuh. Finally, her father was a professor at a very good university and she could have gone there for free but wanted to get out of the house and go to a school a few hours away so her parents refused to pay for her college. Now, again, we love this girl as she really is a sweet kid but why should the tax payers pay for her education? Why should an electrician working in the oil fields who never went to college and is raising a family living in the desert have some of his earnings going towards paying for this persons college education? The question sleazy politicians on both sides of the isle have to consider is whether there are more voters who would gain from forgiveness or more voters who would be upset by forgiveness.
Agree with you 💯. My parents paid out of pocket for my bachelors and I worked a full time job and paid out of pocket for my masters. While there are the ethical borrowers who use student loans for college, there are those (like the girl in ur comment above) that abuse the system. How is this fair to people who paid out of pocket and are upstanding, tax paying citizens. Eff this!
@@msmw6 My guess is by far most people who took student loans considered it 'free money'. In fact that's what my older daughter's 3 roommates and friends all told her. "Why not get loans? It's Free." Obviously the Student Loan program, started on what was supposed to be good intentions, has gotten out of whack. So why are we STILL giving out Student Loans?
Hello Gary, I appreciate your position and I understand where you are coming from. However, there are others who would truly benefit from student loan forgiveness like myself. I went to a school in my state, get a degree in accounting and had 28k In student loans. I was halfway through paying them off when my health declined rapidly. I was forced to put my student loans in forbearance so I could afford life saving treatment. Now, I am only able to work part time but I am still saving on the side for my loans when the payments restart. I say all this to show you that not everyone is irresponsible and some people just truly need a little help. I think interest should be forgive instead of some arbitrary amount and that is after we address college costs and future lending. We pay taxes to help our society as a whole. So, yes, sometimes tax dollars don’t go to things that benefit you directly.
@@garywilson1688 What? She said “it’s free”? Lol wow, just wow. Such a sad and unfair world we live in.
That’s one example far n few…
Why is college so expensive?
My prof needs a new ferrari
In my view, student loan debt became a crisis after the 2005 passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (P.L. 109-8), which exempted student loans from bankruptcy discharge. There are surely a variety of other factors contributing to the rise of student loan debt; however, many who would otherwise seek discharge of those burdensome loans have had no legal relief since 2005.
Rather than fight over government "forgiveness" of the loans, doesn't it make much more sense -- and provide a fairer solution -- to allow individuals suffering under the burden of student loans to seek relief through bankruptcy? The US bankruptcy laws allow well-to-do people and corporations to unburden themselves of excessive debt. Why not younger people who cannot find employment with sufficient income to pay those loans off?
Look how badly it worked out for other countries. Heaven forbid the middle class could afford a house….
I find it amazing that no one seems to bring up applying bankruptcy concepts to this issue. Whatever they do, they won't address the fundamental issue that we have too many folks seeking to get ahead by getting more education, when the market doesn't need it.
You can't declare bankruptcy on something when you have no collateral. What could the loan companies possibly recoup from you? A piece of paper? You fail to pay your mortgage they take your house.
@@ass4sale2 Regular bankruptcy laws in the USA apply to unsecured loans like credit card balances. Admittedly, bankruptcy laws need to be tailored to situations like student loans, tax debts, medical bills, but of all of these cases, the easiest to solve is student loan issue, since the lender is the government anyway. The purpose of applying bankruptcy concepts is to make the lender share in the risk of making bad loans. For student loans, the amounts that the lender should be willing to loan should be dependent on the quality of the student (grades, etc) and the field in which they are trying to get education. In general, it should be harder for bad students to pursue worthless degrees that are going to leave the student a long term slave to poorly chosen education choices.
Actually it doesn’t. Most people in the United States and international community, owe their lives to someone with a higher education. Probably educate people for free if you value your lives?
I don’t owe my life to anyone but my parents😂
I mean what high schooler really makes good decisions? Adults in their 30s and 40s make terrible decisions especially financially. It’s not solely the students faults it’s mainly the high-schools and private schools that are pushing this business model of going to college.
Don’t blame the student, they are pretty much brainwashed into believing in having better opportunities by furthering their education. If they weren’t brainwashed then their wouldn’t be a countrywide issue of large amounts of student loan debts.
Blame the systems and exorbitant college tuition and fees just to pay those folks in high places.
I must be brilliant! In 1980 my HS counselor was angry that I did not go to college even though I took college prep classes. I explained I had no money, my parents would sign no loans and I would work and take classes at the local community college. Fast forward 42 years. I took a few classes but found it HS 2.0. I learned a skill, met my husband, married, had a daughter and saved for her college. She graduated and has a great career. Will the government be reimbursing me for the 12 years of private school and 4 years of college my blue collar family paid? Of course not because we lived frugally and put our child before ourselves.
And this bill will make "the systems and exorbitant college tuition and fees" much worse in the long run.
@@ChrysanthsMum amazing great job 👏🏽 you’re probably 1 out of 10 families that are “brilliant” and do it the right way !
@@lexluthor4156 USA has been turning into a country where entertainment is top priority over an affordable education to further one’s career. A ton of poor leaders and terrible policies have been in tact for decades which is leading this country into a terrible place. I love America, love the diversity but do I prefer many of the leaders and government officials that have been elected time and time again? Not necessarily.
@@gzfashions To be honest, these days I’m feeling foolish for working hard and being an honest person. 😔
How about we cancel interest and fees..... allow student loans to pay principal only. Since the whole point of interest is because of expected inflation and inflation is no one's fault except government. Cancel interest and fees stop growing the loans for federal loans. I mean it's supposed to be federal "aid" anyway. How is it aid if it's exactly like a personal loan.
I have been paying my student loans as much as I could budget even when the forbearance started 28 months ago. I don’t mind paying back what I borrowed. My grip is that they charge interest on these loans. I practically borrowed tax money that I paid out through the years working. Another rule is not subsidizing graduate school loans like undergrad loans. They were charging interest on these loans while “in grad school”. By the time I completed my graduate program, I had 2 years of interest added and capitalized into my principal amounts. I don’t mind if this forbearance period continues because it gives me more time to pay these loans off with more direct principal payments. All this talk about forgiving 10k for each borrower is just wishful thinking. Guarantee, a large # of existing borrowers have left these loans dormant for 28 months. They can only push this stale period for so long before the government cometh again. I hope by the time that deadline comes around, I’ll be done paying what I owe and put this obligation out of my life.
That’s what comes with a mouth you have to pay back interest
Lone
Idc if they bail out student loan debt .....its ok for the government to bail out corporations that make billions in profit but its not ok to bail out student loan debt?????
Student loan forgiveness rarely makes sense. Having a college degree has a huge return on investment over a lifetime. The people you're forgiving are middle and upper middle class people off the backs of working class people's taxes.
If Wall Street can get a bailout, so can Main Street...
Correct.
So to me it just sounds like we need to implement laws alongside forgiveness to prevent price gouging from colleges and predatory practices from banks
Or go to college & pay the fees that you've agreed on & get a career that will make college worthwhile. No point paying $200k for a degree at some liberal arts college in LGBTQ Studies or Feminist Theory
@@TOMinPDX well I did in fact graduate and pay off my college debt but just because I was able to doesn’t mean everyone else is. Also do you know what liberal arts degrees encompass?
@@bmichel2002 the degree encompasses garbage.
@@datguy8296 liberal arts isn’t a major. It’s a category of majors ranging from political science to psychology.
@@bmichel2002 I'll let you in on a little secret. The government doesn't play about its money. It's not about who is able and who isn't. When you owe the government money you pay. Period. It's not one of those A for effort scenarios. Some people will do it more quickly and some people will be slower but they will pay and that's how it should be.
I don't pay taxes so people that signed up for student loans can say "it was hard" and throw up their hands.
The real root of the problem is how greedy colleges have become. I started at a private university back in 2013 and it was 45,000 a year. When I graduated it was 60,000. There were no new benefits or anything. My biggest regret is not going to a community college for the first two years to save money.
@Arnulfo Vasquez so I know this comes off as privileged, but it was very important to my family that I go to a private university. It was expected. But I was also expected to pay for it, so it was a huge financial burden. I was a naive 17 year old when I was applying to schools and for financial aid, and I really wish I would have done more research. I trusted that my family wouldn’t put me into a bad financial position, but I should have done my due diligence. Definitely don’t think my private schooling was any different than a public.
If you limit the amount to $10000 and put an income threshold on forgiveness the effect on inflation will be negligible because the effect itself will be negligible in a lot of cases
insted of Student-Loan Forgiveness. why not ...
1 - refinance old student-loan (with lower interest) order by high to low interest.
2 - start Student-Loan interest celling for new loan.
It’s obviously they want to enslave us like cattle 🐄 , they all know that they can do that
"lower income borrower" Yeah earning $125K a year is "low income". Only $10,000+ a month in salary. I mean HOW could they afford to pay their student loan that also enabled them to have a job at $120K a year instead of making 40K a year that likely the median income is for Average American..
Yes, forgive this loan THEY themselves decided to take to invest into their education to make more money. I mean those poor slobs. Let the poorer income non college educated pay for it. I mean they are just un-educated "scum" anyway...
This is how you drive voters away...
Oh, no! How could we ever deal with an inflation increase of 3.6% after we stop paying a quarter of our salary in student debt every month.
@@davidvillanueva3771 How very pompous of you to assume I don't know how economics works. Perhaps, our economy needs to collapse (again). "The basic rule of storms is they continue until the imbalance that created them is corrected. In this case, we're talking about a global realignment." - The Day After Tomorrow
@@davidvillanueva3771 Someday, I hope your life matters. Best of luck in the coming depression.
So again, this only benefits people who borrowed and didn’t pay it back. I don’t understand how the educated could have been so short sighted when it came to taking out so many loans.
I am confused by your use of the term “educated” because I was only considered “educated” after I already had loans. Loans for an education I had to decide on as a 17 year old living under my parents roof who felt I needed to be “educated”.
@@a.arnold7494 that sounds like a you problem. I know plenty of people who didn’t go to college because they didn’t want the financial burden. Ironic how it worked out
Why is helping the poor or those in debt always worse for the ecconomy, but someone hoarding billions and not paying taxes is "good," for the ecconomy?
Why not make college like high school, you shouldn't even have to pay to go to school, maybe the colleges need to be part of the regular school system, then we wouldn't have so many Homeless running the streets.
@2:28 So below $125,000 a year, you’re a low income earner??
Well, that’s inflation!!! 🤬
Lol I know. They want to help people in the top 10% earners
Land of free. FREE Health care and abortion services; FREE private education and political midterm traction.
So… why would I pay a doctor, lawyer and engineer’s loan when they probably make more than me. 125k a year is not low income.
Seniors ain't getting no benefits from loan forgiveness, BUT seniors vote.
The corporate overlords deploying the WSJ videos to avoid losing a bit of money.
Terrible system with terrible consequences ... It's unfair all around.
To me this seems excessively expansive and it does not tacle the real issue that are underregulated university tuition. Public universitets should provide educational for free just like in europe.
US's tax rates for middle class is much lower than Europe's. Not saying US can't increase tax on middle class but i don't think Americans will be very welcoming of that change.
@@prism2451 BS, the tax rates between Italy and the US Is almost the same, but in Italy universisties are almost free, here in the US universisties are predatory organizations. most the taxes go to the military
@@mackyracky Free public universities means that you have to pay financially, which will increase taxes, and it is easy to breed corruption, Italy is already heavily in debt
@@小小灵 1- taxes in a capitalist society are inevitable, the progress of a nation Is measured on the education level of it's citizens, if we put an expansive barrier of entry to universisties for the poor and middle class we are basically no different from a feudal society in wich aristocracy or in this case wealthy children get a ahead in Life and other people get stuck in poor livelyhoods and mediocre low Level education.
@@小小灵 3- if You don't see a real societal collapse in the US (even if student Loan debt trap exceed a trillion dollars in volume) Is because the US military department Is the biggest job and education center in America, and this Is not a coincidence but by design.
if You came from a middle class income family what can you do? either You go to public university and of You are fortunate to find a job You become a wage slave or You become a soldier slave to the US military.
WHY NOT MAKE COLLEGE EDUCATIONFOR STATE UNIVERSITIES FREE OF CHARGE FOR GOOD? COME ON
Because it's unconstitutional.
Because politicians don't want to.
End the capitalization of interest!!!!
Surprisingly, after graduation, interest does not capitalize on federal student loans. Interest is only based on the principal (unless you opt for for forbearance or deferment)
Thank god. I still have have 19900 and only 14 months to pay it off
just think if it as a refund on the interest the government shouldn't charge for education, and continue to eliminate the interest for future students, Bada bing.
Imagine:
You go to a university to get a bachelor's degree
Rack up anywhere between $50,000-300,000 student loan debt that doesn't go away
You struggle through school and eventually graduate
Your plan is to completely evaporate your debt in a few years with your presumably high salary
Turns out you can't find any jobs with that type of salary so you have to chose what you have on hand
Eventually you end up with a bunch of debt and a salary that can barely fulfill your humble lifestyle
GO universities and their fat pockets!
OH NO.. .. when I returned to University (1997) at age 40, I had no idea ... NO IDEA what I was going to do, or what the future held for me. Of course, my original intention was only - to complete my Bachelor's, which I did. As far as planning for that BIG JOB or HIGH PAYING.. No... I was not after that.. to the end, yes I finally set a path upon what I would use the degree for. For me, it met a career in California State Government.. upon which I retired from. Now, if I had stayed with ONLY the 4 years, most likely I would not have handed any student loans... but, given the addition of the master, and the Post Grad.. hello 220, 000! There today with interest growing each day.. with ZERO payments being made.. and never having to have the worry of said monies being paid off.. during this lifetime. In fact, I could GO BACK to school and get another 200,000 for a degree in Basket Weaving (so to speak).. ... and laugh it off. Have no worries Dear American Tax Payer, I won't waste any more of your money.. .. the Government continues to do that without my help.
I paid 25k for my bachelors degree. People who pay much more than that are making poor decisions somewhere.
@@biometal770 of only this was the case for everyone
I didn't watch the video, but you know what else comes with risk? Shorting a company then publishing lies to manipulate the companies share price by routing securities with fraudulent intent to deceive it's investors all across the board for personal gain. I.e. own companies benefit.
Also, you don't pay for a service that didn't provide what was advertised.
This guy said Biden’s first term as if Biden will have a second one 😂
If Trumpists keep taking over the Republican Party, and driving centrist Republicans across the aisle, then he probably will. At the local and state level, I'm already seeing Democrats running for office on platforms that look a lot like Reagan era Republicans. Karl Rove's policy of pushing the center to the right may have been effective, but not in the way he intended.
No reason why a bachelor should cost someone in there 20s, 100k.... There should be a price cap, 4 year degree for 10k.
The college and university system(s) need to only require courses that BENEFIT the student towards their GOAL for the future career, that said education will cover. Such as... Are you going to travel to a foreign country? Yes or No. Yes.. ok, which one... (name) ok.. you are required to take a foreign language. OH, you answered NO.. ok, no requirement necessary... (said credits should be fulfilled with courses that will benefit... have a direct link to the chosen career field(s).
@@wolfstar_productions Many bachelor degree shouldn't even be 4 years. One or two year tops. There bootcamp that can teach an individual web dev,data science, ux/ui, cyber security ect in 3 months but a computer science degree will take you 4 years. In those four years, you need to take general studies for the first two years which is totally unrelated to the degree your pursuing.
Doesn't really help that the people in charge don't have to deal with the consequences of their decision
Someone's gotta pay those one way or another...
Just give everyone who graduated high school between the year 2000 and 2020 a $10000 check to make things fair
Some people worked while in college and didn’t end up with huge loans
Some didn’t buy expensive cars and homes and were able to pay off their loans within 5 years
While others made a financial decision not to go to college and incur debt, but would like to go to college given the opportunity. $10000 towards tuition would be a godsend
That’s already the Pell grant… you could possibly expand it so more people can qualify but you already have that in place lol.
For most debt I would say 0% interest would be really great. Raising the rate the more time it is outstanding so to incentivize people to pay it off would be good. Say 0% for the first 5 years then 2% then 4% cap it at 6% which is what the loans are at right now any ways. That is a lot more reasonable and sound solution in my opinion
Note that us taxpayers pay $1 trillion a year to the Military Industrial Complex. If you’re not familiar with a Military Industrial Complex, please look it up. It’s basically a way to funnel the wealth of the middle-class into corporations and concentrate wealth to the rich. This whole talk about us taxpayers not having enough money to pay for college education is precisely because it’s wasted on the Military Industrial Complex. If we cut off that gravy train, we have $1 trillion a year which can pay for college, healthcare, Social Security. Things like that don’t listen to the stupid propaganda
And millions of Americans as crippled spenders due to immense loan debt for decades isn’t more of an impending disaster? REGULATE THE UNIVERSITIES. They don’t need more fancy fountains and lazy rivers. They need fair prices.
It's the Americans who took out these loans who are at fault. If they couldn't pay they shouldn't have signed up for a loan.
@@Guy-cb1oh tell me how an 18 year old who is encouraged towards education their entire life by parents who paid 2,000 dollars a semester for school knows enough about the world to NOT take 100,000 dollars in loans to get a degree that everyone in society told them to get.
The schools don’t need to cost this much. Yet they do. Presidents of universities have millions of dollars a year salaries. These are “nonprofits”
What about future borrowers? Will they be able to afford their college debt?
We need mortgage forgiveness program ASAP !!!
Yes… don’t forget my car loan and my expensive home gym.
Not one word that this would effectively be a transfer of wealth from those worse off to those better off. If your parents are better off, you are more likely to go to college, and if you do so go to a more expensive, better college. Not one word about the long term impact of student-loan forgiveness on future costs for education or future availability of loans.
Dude I work minimum wage living paycheck to paycheck if I got rid of the debt I’d finally be able to save up an emergency fund. I’m not a rich guy.
I have a bad feeling they wont implement any form of student loan forgiveness, or what they give will be very minimal it does literally nothing. But many of those suffering under the debt will be unable to resume payments due to multiple economic factors slamming the population. I predict there will be a lot of people who just simply refuse to resume payments and it will eventually force the government to make a more reasonable solution whatever it may be.
The republicans got rid of Government backed loans and spell Grants back in the 90’s and early 2000’s . Privatization predictability led to abuse
Eliminate and cancel all compound interest. Make student debt dischargeable in bankruptcy. Make the amount of money people can take out for loans predicated on their academic record and abilities. These steps would ease the burden on those who owe money and bring down the costs of education on the whole.
“Make the amount of money people can take out for loans predicated on academic records”.
The Left: “That’s so racist!!!”
No…
Inflation: Let's talk about price gouging by corporations.
Forgiving student loans is also in essence a regressive tax. It effectively takes money from blue collar lower class people and sends it to college educated middle class and upper class graduates. Sure rich people will pay some but so will blue collar workers. And who benefits? The upper half of society.
Exactly. This is all about the middle class & wealthy, the only ones who go to college & most of them are white (not that I care but they are usually the ones screaming about social justice). This entire thing is about them and it'll be the poor who suffer the consequences. Its really friggin annoying.
Blue collar workers mostly received PPP loans and their loans were forgiven
Don’t have an issue with forgiving student debt, my issue is only forgiving student debt and not doing anything to fix the higher education system in the US. Unless we reign in tuition at universities this will just be a bigger issue in 15 years than it is now. I believe that loans spent on tuition should be forgiven but loans for housing and or other things like cars or vacations (I know more than one person who has used their student loans to pay for things) should not be forgiven, so a blanket $10,000 or however many dollars forgiveness would do more harm than good
What a kick in the gut for the ones having to pay their way, and the ones who couldn't afford to go to college because their families didn't have the money.
So true! Why do taxpayers who make good decisions continually have to bail out the ones who make bad decisions?
If your college degree doesn't produce enough value for you to pay it off, it certainly doesn't have enough value for your neighbor to pay it off.
I know I’ll be out there to vote!
My decisions for voting will for sure be impacted by student loan legislation that may/ may not come.
Exactly as planned. Biden buying votes with other people's money. Do you know who you're even stealing from?
" lower income" we made peanuts for years. Now that our income went up this year we are screwed...
As someone who’s never gone to college, I’m not trying to pay taxes towards someone else’s student debt😒
But you're happy to hire that person and be the beneficiary of that investment?
@@LongDefiant it doesn’t matter to me what someone spends their paycheck on. But I do hope that the government not forgiving loans will make people think twice about the risks/benefits of going to college and not just as a mandatory thing. For me, not going to college was the best decision I made.
@@antonysehter3937 so you want to turn this into some sort of a morality lesson? Capitalism knows no morality.
But if you were an employer you would be happy to pay $25 an hour instead of $28 an hour because your employee doesn't have a college loan payment?
Shut up.
@@LongDefiant yes, and that hired person can then pay his/her debt as a responsible adult. Instead of asking someone else to pay for it.
JUST CANCEL IT 💯💯💯💯💯💯💯
Just have borrowers pay their loans. Why should non-college-educated people pay for college tuitions they didn't use? It's not fair for all of us who already paid our loans or paid for our schooling up front.
Facts!
Why doesn’t the federal and state governments put a cap on how much the colleges raise tuition? Only being able to raise the at the rate of inflation.
It's a touchy topic but I'll be blunt... Canceling student debt is like a cough drop for covid. It may address the symptoms but not the cause. Additionally, It definitely feels like picking winners and losers - I mean why not cancel healthcare debt instead... at least those were unintentional. I don't know how to fix it... I'm just giving feedback.
That’s a great point, thank you for the ideas!
As a non-american, this whole US education loan system is kafka-esque and ghoulish.