Cancel student loan debt?

[Meadmaker]

Originally Posted by JoeMorgue

Again I know this is a certain someone's default answer to everything, but we can at least address the Student Loan Crisis without jumping right to "Burn Capitalism to the ground, begin the Socialist uprising."

Especially since without Capitalism... what are you even going to college for? It's 2020. If it's just about knowing stuff go on the internet. "Knowledge" is post-scarcity along with pictures of boobies and funny cat pictures. Hell major colleges on the level of MIT and Cambridge put almost all of their actual study material online for free.

People go to college to get jobs, not to get smarter. Pull the icky, sticky core evil of "Capitalism" and college as a post-information age concept collapses in on itself.

I have wondered, as have many, how Covid will affect the future of college. Right now, my kid is studying on the internet, as are many, many, college students across the country. Surely some people will realize that it is possible to push education via internet, at a significantly lower cost than the 20th century way of doing things.

I take some very good online classes, and pay next to nothing for them. I wouldn't say they are as good as my high quality college education back in the day, but they're close, and they are a whole lot cheaper.

[Segnosaur]

Originally Posted by cosmicaug

Beyond the college grads that paid their loans, it actively hurts non college educated and trade workers that already have it rough. It seems to reward the worst actors and penalize the best, which seems like bad policy and incredibly bad in regards to future voting.

(Comic of a trolley heading towards a group of people tied to a train track, with the question 'should it be diverted since it is unfair to those it already killed)

https://pbs.twimg.com/media/Em8dSApW...jpg&name=small

Cute comic, but it has one problem...

The insinuation is that the people the trolley has run over are dead i.e. what happens to them is irrelevant to what happens later. But that is a flawed analogy. The people that had been run over are still very much 'alive', and they have an interest in what happens if/when the trolley is diverted, since it will be their tax money that goes to paying for the other people's debt.

A better analogy would be that if the people who just got run over by the trolley (but survived) had to pay the switch operator to divert the train from running over more people. You could argue that "it is still the best option for society in general", but the people that had been run over are still being harmed twice... once when they were run over (i.e. affected by high college fees/debt), and a second time when they have to pay for others who had their debts forgiven.

[crescent]

Originally Posted by Meadmaker

I can't help but notice that all of your quotes dealt with per student funding. None of them said anything about absolute funding. I haven't looked it up, but that suggests to me that absolute funding is probably more, which would mean there are more students. It plays into the narrative that perhaps more people are going to college than really ought to be going to college.

Hmmm....

So I looked that up. The proportion of the U.S. population with college degrees continues to climb - I knew that was true of women, but it is also true of men. I would have thought it would hit a plateau as costs went up and student loans became more predatory. I was wrong about that:

Percentage of the U.S. population who have completed four years of college or more from 1940 to 2019, by gender

Quote:

n an impressive increase from years past, 36.6 percent of women in the United States had completed four years or more of college in 2019. This figure is up from 3.8 percent of women in 1940. A significant increase can also be seen in males, with 35.4 percent of the U.S. male population having completed four years or more of college, up from 5.5 percent in 1940.

[JoeMorgue]

It's not a trolley problem if we're talking about forgiving student loan debt without talking about whether or not should be doing doing student loans.

[TragicMonkey]

Regardless of the worth of the thing the debt was for, I think it's reasonable that people getting debt forgiveness from society should do something in exchange that benefits that society. Community service, for example. It needn't be a dollar-for-dollar accounting, but even if it's only a minimal gesture I think it should be made. People get mad when they perceive other people "getting something for nothing", I think a token of appreciation would go a long way to smoothing the sell. It's just good manners.

[acbytesla]

Why not just allow the same kind of debt cancellation that we use for other financing? I mean if a failing business owner can have his debt canceled, it seems reasonable that others could avail themselves to this kind of grace.

[TragicMonkey]

Originally Posted by acbytesla

Why not just allow the same kind of debt cancellation that we use for other financing? I mean if a failing business owner can have his debt canceled, it seems reasonable that others could avail themselves to this kind of grace.

Doesn't it depend on who he got the debt with? Private lenders are doing it as a business, and writing off a debt is simply the risk they take when they gamble. But if it's the government doing the lending then it's not really a gamble.

[Segnosaur]

Originally Posted by JoeMorgue

College also is biased toward low tech fields that never change.

You can't go to college for 2-6 years in the IT or Medical fields and be set for the next 40 years of your working life.

I'm dropping a few hundred to a couple of thousand bucks a year, and will be for the rest of my working life, to get new certs, upgrade old certs, etc.

I have a basic Computer Science degree but I'll admit its functionally useless at this point. I got in the Windows 3.11 / Dos 6.22 days.

I am in a similar boat... my computer science degree is from the 80s... that was pre-windows (I think people were using Dos4 when I started). And a lot of what I learned wasn't transferrable to work... I never programmed in Fortran, or Pascal for example.

But, some of what I learned HAS been useful. (The networking, as well as a lot of database stuff.) And more importantly, some of the stuff I learned in university WAS useful in the first job that i got... which in turn gave me skills that I used in the second job, and so on. I learned C in university, which helped me learn C++ later, which then helped me learn Java.

[mumblethrax]

Originally Posted by crescent

Some of those people trapped in poverty are there because they're drowning in student loans, which they took out in hopes of getting out of poverty.

Sounds like the problem is poverty, not student loan debt.

Quote:

College is a means to get out of poverty.

There's this idea that education is the great equalizer, but it's mostly a myth. Colleges in the US replicate socioeconomic advantage across generations.

If the goal is greater access to a college education, reducing the barriers to a degree makes sense. Subsidizing debt after you've sorted people along socioeconomic lines is just a giveaway to the upper and middle classes, ie regressive.

[crescent]

Originally Posted by TragicMonkey

Regardless of the worth of the thing the debt was for, I think it's reasonable that people getting debt forgiveness from society should do something in exchange that benefits that society. Community service, for example. It needn't be a dollar-for-dollar accounting, but even if it's only a minimal gesture I think it should be made. People get mad when they perceive other people "getting something for nothing", I think a token of appreciation would go a long way to smoothing the sell. It's just good manners.

Public Service Loan Forgiveness (PSLF)

It has been my experience that such programs don't keep up with changes in student loan programs.

For instance, when I was looking in to joining the Peace Corps, they touted that the PC can help pay down student loans. But in the mean time the loan program changed and the sort of loan that the PC was paying down was not the one much in use anymore. They ended up paying down about 2% of the original balance of the loans, while the interest continued to accrue, such that I owed more at the end of my service than at the beginning.

I hear now of people trying to use the PSLF I linked to above. It seems like a good program but a lot of people trying to use it run into technical glitches making them ineligible for the program.

[TragicMonkey]

Originally Posted by crescent

Public Service Loan Forgiveness (PSLF)

It has been my experience that such programs don't keep up with changes in student loan programs.

For instance, when I was looking in to joining the Peace Corps, they touted that the PC can help pay down student loans. But in the mean time the loan program changed and the sort of loan that the PC was paying down was not the one much in use anymore. They ended up paying down about 2% of the original balance of the loans, while the interest continued to accrue, such that I owed more at the end of my service than at the beginning.

I hear now of people trying to use the PSLF I linked to above. It seems like a good program but a lot of people trying to use it run into technical glitches making them ineligible for the program.

Yeah, it was Americorps when I was college-aged. It didn't seem to really work out for the people I know who did it. I was thinking something a lot less formal and buggy, like "okay, but spend Saturday mornings picking up highway litter for six months" or something. As the ancient prophet said, "there's plenty of chores need doing".

[acbytesla]

Originally Posted by TragicMonkey

Doesn't it depend on who he got the debt with? Private lenders are doing it as a business, and writing off a debt is simply the risk they take when they gamble. But if it's the government doing the lending then it's not really a gamble.

Student debt like all other debt use to be allowed to be discharged through bankruptcy. But that changed.

There is something inherently wrong with a system that encourage profiteers to prey on the underclass getting them to secure government debt that they can never pay off.

[TragicMonkey]

Originally Posted by acbytesla

Student debt like all other debt use to be allowed to be discharged through bankruptcy. But that changed.

There is something inherently wrong with a system that encourage profiteers to prey on the underclass getting them to secure government debt that they can never pay off.

I agree. But the solution isn't to feed the parasites, or shoo them off one victim and onto another. It's to stop the parasitism entirely.

[theprestige]

Originally Posted by SuburbanTurkey

I humbly suggest that the Devos family's fleet of yachts is not an efficient use of the nation's wealth, even factoring in the boat mechanics and barnacle scrapers that manage to pull a wage from their existence.

It's not the nation's wealth, though.

[JoeMorgue]

Originally Posted by TragicMonkey

I was thinking something a lot less formal and buggy, like "okay, but spend Saturday mornings picking up highway litter for six months" or something. As the ancient prophet said, "there's plenty of chores need doing".

While I agree with the overall point being made, it runs up against another problem. One of the reasons our current system of "college" is starting to show cracks of the inevitable collapse is that we have more people then we have jobs to go around. You can't, by definition, solve this problem with busy work.

In other words if Ted defaults on student loan debt and one of the ways he repays his debt to society is to "Perform Task X" well... then Ted why not just train Ted to perform Task X and get a job doing it in the first place?

Honestly at this point I think the whole system can just collapse naturally. Stop giving out student loans, give debt forgiveness to those who need it, but just stop propping the system up and let it die.

Traditional "Put a total hold on 2-6 years of your life just when you are entering adulthood, all so you can sit in a room and just get information" will die off but good riddance. It can be replaced with a 300 dollar Chromebook and a 30 dollar a month internet service. Raw knowledge is now as democratized as it possibly could be short of jacking into the Matrix. Going to college "to get smarter" is self defeating at this point.

Skills that societies needs will survive in trade schools and apprenticeships and those offer a much better return on investment.

The only thing we lose, and I'm getting the impression more and more this is the elephant in the room, is college as a pure status symbol and the idea of an elite "Educated" class.

[SuburbanTurkey]

Originally Posted by theprestige

It's not the nation's wealth, though.

Unless they derived it overseas, it's the nation's wealth. It may be in their private control, but that can easily be rectified. Tax codes change all the time.

[acbytesla]

Originally Posted by TragicMonkey

I agree. But the solution isn't to feed the parasites, or shoo them off one victim and onto another. It's to stop the parasitism entirely.

Yes. But for 40 years I've heard the rhetoric that we need to rethink education and for 40 years I've only seen the status quo only get more entrenched.

[theprestige]

Originally Posted by Checkmite

What a toddler-tantrum of an argument.

We can discuss forgiving college debt because it's public debt, it's within the federal government's authority to forgive. The other debts you mention are private debts and therefore not.

Eminent domain. The government can seize private debt and forgive it, to boost the economy. But let's not get ahead of ourselves. First we should agree on whether it actually boosts the economy.

And that's true even if we stick to taxpayer-funded loans that the government already has authority to forgive. Not only that, but we should also agree about the opportunity costs. Is the government going to continue stimulating the economy by taking money from productive citizens, making bad loans with it, and then forgiving the loans? Is that really the best use of that money? It seems to me that forgiving large amounts of debt should be a violent spur to reconsider the premise of these debts in the first place.

[theprestige]

Originally Posted by acbytesla

No. Not being paid enough is not the same as being unproductive.

Clearly you're not being productive enough to pay off your debt to the people who invested in your productivity.

[Meadmaker]

Originally Posted by Segnosaur

I am in a similar boat... my computer science degree is from the 80s... that was pre-windows (I think people were using Dos4 when I started). And a lot of what I learned wasn't transferrable to work... I never programmed in Fortran, or Pascal for example.

But, some of what I learned HAS been useful. (The networking, as well as a lot of database stuff.) And more importantly, some of the stuff I learned in university WAS useful in the first job that i got... which in turn gave me skills that I used in the second job, and so on. I learned C in university, which helped me learn C++ later, which then helped me learn Java.

Youngster.

Actually, I was just a few years earlier. In other words, from a completely different generation of technology. And I've hit the point where all that new learning I need just isn't happening. It's too hard, and I'm tired of it.

However, that's diverging from the topic. An on-topic related fact is that I, and I'm sure others in this thread, find myself competing with a bunch of people who never went to college at all, or who went for a, shall we be generous and say less marketable, degree, and then went to "boot camp" or taught themselves how to program.

When it comes to programming, they're just as good as I am, and in terms of productivity, they're usually better, because their knowledge is more recent. They didn't need college to get those useful job skills.

[pgwenthold]

Originally Posted by crescent

But again, even if we keep the proportion of the population that goes to college equal - tuition has gotten more expensive. Much, much, much more expensive.

College tuition rates have been rising about twice as fast as regular inflation. That really starts to add up over time.

Tuition Inflation




To me at least, the higher tuition rates are the elephant in the room. All of us thinking about what our cohort paid for college is meaningless in the current situation. The current generations, our kids and grandkids, are facing vastly higher college costs than we did.

How does the increase in tuition rates compare to the cuts in government support?

[theprestige]

Originally Posted by acbytesla

Why not just allow the same kind of debt cancellation that we use for other financing? I mean if a failing business owner can have his debt canceled, it seems reasonable that others could avail themselves to this kind of grace.

I would fully support this, as long as we agree that it's essentially all one thing: College students are business owners whose business is failing due to some combination of misfortune and mismanagement.

[SuburbanTurkey]

Originally Posted by theprestige

Clearly you're not being productive enough to pay off your debt to the people who invested in your productivity.

This is tedious. I've interacted with you enough to know you're not this obtuse.

Productivity and wages aren't inextricably tied. The entire history of labor relations shows that haggling over how much a worker's productivity should belong to that worker is very much a contentious issue.

Let's say all the burger flippers get together and form a union that forces the burger joint owners to increase their wages. This kind of thing still occasionally happens, so it's not an absurd hypothetical.

Did their productivity instantaneously increase once the union agreement was signed by management? Of course not.

Acting like worker wages is some immutable property of the universe and economy is absurd and you know it. Such things are the frequent matter of government regulation in pretty much every country on Earth. Please don't peddle this smooth-brain nonsense, it's unbecoming.

[JoeMorgue]

Well it seems we're not talking student debt reform at all, but rather having some broad philosophical discussion about whether to punish rich people for being rich or poor people for being poor.

[Meadmaker]

Originally Posted by acbytesla

Yes. But for 40 years I've heard the rhetoric that we need to rethink education and for 40 years I've only seen the status quo only get more entrenched.

I've been surprised by that myself. Up until about 2000, I really didn't see any need for huge changes in the concept of "college" and education in general.

Once youtube, edX, udemy, and now Zoom have become a thing, I sure can't figure out why we thing we need a geographically concentrated cluster of 18-22 year olds to provide the necessary skills for the next generation of workers.

Not that someplace like MIT doesn't have value. It's incredibly valuable to be in that kind of environment.

But that local, run of the mill, college down the road that you go to if you didn't get admitted to the University of Michigan? Maybe we could find a better way, and I've felt like this for at least a decade, but if anything, the four year college's hold on education has grown stronger even as the technology needed to replace it has matured.

[SuburbanTurkey]

Originally Posted by JoeMorgue

Well it seems we're not talking student debt reform at all, but rather having some broad philosophical discussion about whether to punish rich people for being rich or poor people for being poor.

So far I've only seen suggestions to punish the poor by compelling labor usually reserved for those convicted of crimes.

Taxing the wealthy to pay for needed social spending isn't punishment. Stuffing them into guillotines is punishment, and I have yet to see anything of the sort suggested. Requiring the rich to pay more taxes isn't punishment no matter how much they cry about it.

Such moralizing is inevitable. The conservative mindset often revolves around the ideological belief that everyone in society is where they deserve to be.

While there is no shortage of moralizing from progressives and those further left, I have yet to see any such framing of the issue here.

A single person in debt is a personal problem. Large swaths of population in debt during the prime working years of their life, causing them to modify their spending habits and life decisions in service to that debt is a society problem.

[TragicMonkey]

Originally Posted by JoeMorgue

Well it seems we're not talking student debt reform at all, but rather having some broad philosophical discussion about whether to punish rich people for being rich or poor people for being poor.

We should punish poor people who attempt to become rich, for not staying in their lane. How can we accomplish this? By convincing them that to become rich they need to spend enormous amounts of borrowed money. When they drown in debt this will slap them back where they belong and encourage the rest to know their place. The only fault with this scheme is that we'd have to lend out the money...perhaps we could get the government to chip in?

[Meadmaker]

Originally Posted by TragicMonkey

We should punish poor people who attempt to become rich, for not staying in their lane. How can we accomplish this? By convincing them that to become rich they need to spend enormous amounts of borrowed money. When they drown in debt this will slap them back where they belong and encourage the rest to know their place. The only fault with this scheme is that we'd have to lend out the money...perhaps we could get the government to chip in?

Ouch.

[theprestige]

Originally Posted by SuburbanTurkey

This is tedious. I've interacted with you enough to know you're not this obtuse.

Productivity and wages aren't inextricably tied. The entire history of labor relations shows that haggling over how much a worker's productivity should belong to that worker is very much a contentious issue.

Let's say all the burger flippers get together and form a union that forces the burger joint owners to increase their wages. This kind of thing still occasionally happens, so it's not an absurd hypothetical.

Did their productivity instantaneously increase once the union agreement was signed by management? Of course not.

Acting like worker wages is some immutable property of the universe and economy is absurd and you know it. Such things are the frequent matter of government regulation in pretty much every country on Earth. Please don't peddle this smooth-brain nonsense, it's unbecoming.

I'm talking specifically about the problem of a creditor's return on their investment.

The whole point of a loan is that it gets paid back. With interest. If loaning you money won't put you in a position to pay it back, what's the point of making it a loan? If the only job you can get underpays you to the point where you cant cover the costs of your education, what's the point of loaning you money for your education?

At that point, you should call it what it is: A gift.

And if you're giving such gifts with taxpayer money, you need to have some good explanation for the taxpayers about why this is the best use of their money.

[TragicMonkey]

Originally Posted by SuburbanTurkey

So far I've only seen suggestions to punish the poor by compelling labor usually reserved for those convicted of crimes.

What, because I suggest that loan forgiveness should be accompanied by minimal community service? I fear you betray your own classist snobbery here: you don't place a value on work! You think "labor" is something bad, a punishment for criminals.

Work is work, it needs to be done, and people ought to be paid to do it. That's the exact opposite of punishing the poor.

[JoeMorgue]

Efficient use of resources isn't a capitalist/socialist position, it's just basic common sense.

If you went 16,000 dollars (the current average debt at the time of graduation here in the US) into the hole to get a a degree in something that begins in "Liberal" and/or ends in "Studies" that's hardly my problem. You didn't learn a useful skill, you obtained knowledge which, again, you can get for free/pocket change in 2020.

Society has a duty to spend its overall resources on things that will return that investment. That's, again, not a capitalist/socialist position it's "not being intentionally stupid."

There's no Polysci 101 approved clustering of government ideals where society paying for people to go to college to get whatever degree "they" want to get makes sense.

[crescent]

Originally Posted by Meadmaker

... I sure can't figure out why we thing we need a geographically concentrated cluster of 18-22 year olds to provide the necessary skills for the next generation of workers.

Maybe it was just my major, but there were still a lot of things I did in college that were physical, such that we used specialized equipment or did physical things that sometimes required a TA to lean over a shoulder to show how its done.

I mean chemistry lab, physics lab, use of spectrometers and gas chromatographs, chemical testing, dissection, growing plants in greenhouses (because its hard to grow them anywhere else in February) to compare fertilizers and such. We had a four week field camp at the beginning of the program and a one-week camp at the end.

It's going to depend upon the field of study, but a lot of fields would still require an on-site presence.

[SuburbanTurkey]

Originally Posted by theprestige

I'm talking specifically about the problem of a creditor's return on their investment.

The whole point of a loan is that it gets paid back. With interest. If loaning you money won't put you in a position to pay it back, what's the point of making it a loan? If the only job you can get underpays you to the point where you cant cover the costs of your education, what's the point of loaning you money for your education?

At that point, you should call it what it is: A gift.

And if you're giving such gifts with taxpayer money, you need to have some good explanation for the taxpayers about why this is the best use of their money.

Given that the creditor is the government, prompt repayment of the loans isn't the only concern.

We should call it what it is, public spending. I agree, the government should not be in the business of loaning money to students to pursue education. College educated citizens can pay back the government the way everyone else does, through taxes on their income and other wealth. Some people will consume more government services than they pay in taxation, others will not. Such is the nature of living in a society.

[crescent]

Originally Posted by pgwenthold

How does the increase in tuition rates compare to the cuts in government support?

Gads, I don't know. If you want that level of analysis you'll have to do it yourself.

[theprestige]

Originally Posted by TragicMonkey

We should punish poor people who attempt to become rich, for not staying in their lane. How can we accomplish this? By convincing them that to become rich they need to spend enormous amounts of borrowed money. When they drown in debt this will slap them back where they belong and encourage the rest to know their place. The only fault with this scheme is that we'd have to lend out the money...perhaps we could get the government to chip in?

The real tragedy is that it's not even intended as a punishment. They're not supposed to drown in debt. This wasn't a genius plan to punish them. It was a sincere and heartfelt plan to really help them. The whole idea is that far from drowning in debt, they'll be swimming in profits. The nation invests in their education, their education gets them a high-paying job, and the high-paying job puts money back in everyone's pockets - debtor and creditor alike!

But somehow it's not working out that way.

[SuburbanTurkey]

There's definitely a feeding frenzy when it comes to government subsidized loans. The government guarantees loans, but does nothing to ensure that schools that receive the money are spending responsibly. Schools are in competition with eachother to attract students with fat wallets filled with public money, and that leads to an arms race of spending to make the campuses more luxurious and elite.

Nobody involved wants to curtail the gravy train. Not the college admins that are pulling fat salaries, not the loan companies that are guaranteed repayment, and not the students who just want to get the best education that the modern job market demands.

It's a true abomination that only a public-private partnership could dream up. The government, in the end, pays for it all because many of these students never repay the debt. The government pays, just in the most idiotic and detrimental way imaginable. Far simpler to just state fund the universities, stop the glut of cash, and provide quality education directly as we do for K-12.

[acbytesla]

Originally Posted by theprestige

I would fully support this, as long as we agree that it's essentially all one thing: College students are business owners whose business is failing due to some combination of misfortune and mismanagement.

That's the way it use to be until the government changed it and made it impossible to discharge student loans.

[Elvis666]

Originally Posted by Segnosaur

The insinuation is that the people the trolley has run over are dead i.e. what happens to them is irrelevant to what happens later. But that is a flawed analogy. The people that had been run over are still very much 'alive', and they have an interest in what happens if/when the trolley is diverted, since it will be their tax money that goes to paying for the other people's debt.

Yep, college loan debt is not a new problem. I'm well into retirement and both my wife and I had to pay back thousands of dollars in loans. My kids worked their way though with a combination of scholarships and loans, and my wife and I took care of those, too. I see the reasoning behind cancelling the debt, but those of us who had to pay 10s of thousands out of our pockets see another, possibly more selfish, side.

[acbytesla]

Originally Posted by theprestige

Clearly you're not being productive enough to pay off your debt to the people who invested in your productivity.

No. Its market conditions that dictate wages.

[TragicMonkey]

Originally Posted by theprestige

The real tragedy is that it's not even intended as a punishment. They're not supposed to drown in debt. This wasn't a genius plan to punish them. It was a sincere and heartfelt plan to really help them. The whole idea is that far from drowning in debt, they'll be swimming in profits. The nation invests in their education, their education gets them a high-paying job, and the high-paying job puts money back in everyone's pockets - debtor and creditor alike!

But somehow it's not working out that way.

Why isn't it working? I can see one obvious reason it's not: the high-paying jobs aren't being acquired. Either no jobs at all, or jobs that pay too little. So either a) the supply of jobs needs to be increased, b) the pay of jobs needs to be better, or c) the expense of the education needs to be reduced. Or d) some or all of the above.

If Lender X is willing to loan $YY,YYY to W for a degree in Q, is Lender X willing to hire W for a salary of some reasonable ratio to $YY,YYY? If Lender X laughs uproariously at the notion, says Q is useless, and the starting pay for an employee with a degree is 1/10,000th of $YY,YYY...then perhaps Lender X is more of a parasite than a symbiont to society.