Just cancel student debt already

[foundmylazybum]

Well I'm going to say this:

And it's more of a value or a concept than any sort of solution.


A lot of times we (americans) seem to have this moral ideal that it's important to somehow suffer in some way, form or fashion before we find comfort.


Got school loans? Well the very moral thing to do is WORK VERY HARD for years on end sacrificing.. I mean everything! To pay them back and show how "good" of a person you are..because look how much you have toiled... and right near the end of your life you will have earned a modicum of comfort!


The very idea that we would grant humans comfort without the moral payment of suffering first (in the same way "i" suffered) appears to be the definition of "unfair" to so many.


(When, in fact..those people are uncomfortable too 💜)


What a crock of shit.

Maybe we don't have to link suffering and comfort together. We could just grant comfort because it's needed.

[AJL]

Graduate school loans are not federally subsidized (whoever said that student loans were.) I’m in grad school and took out some loans to cover tuition.

My undergraduate tuition was paid for by my parents and I fully recognize how fortunate I was to have that resource. But I also went to college 25 years ago. A lot has changed since then; most importantly the cost.

I don’t need student loan forgiveness, but I support it. I also don’t need food stamps, housing subsidies, Medicaid, WIC, cash assistance, or any additional other social welfare benefit, but I sure as fuck support those programs, too.

[sent]

Dec 27, 2021 20:46:57 GMT -5 AJL said:

Graduate school loans are not federally subsidized (whoever said that student loans were.) I’m in grad school and took out some loans to cover tuition.

My undergraduate tuition was paid for by my parents and aunt fully recognize how fortunate I was to have that resource. But I also went to college 25 years ago. A lot has changed since then.

I don’t need student loan forgiveness, but I support it. I also don’t need food stamps, housing subsidies, Medicaid, WIC, cash assistance, or any additional other social welfare benefit, but I sure as fuck support those programs, too.

Grad school loans are not federally subsidized since 2007. Prior to that there were subsidized loans available for grad school. I took out only subsidized loans for undergrad and grad school from 1997 - 2004. I looked up my loans today - they were subsidized the entire time I was in grad school and 6 months afterwards which is when I began repayment.

[formerlyak]

Dec 27, 2021 22:05:30 GMT -5 sent said:

Dec 27, 2021 20:46:57 GMT -5 AJL said:

Graduate school loans are not federally subsidized (whoever said that student loans were.) I’m in grad school and took out some loans to cover tuition.

My undergraduate tuition was paid for by my parents and aunt fully recognize how fortunate I was to have that resource. But I also went to college 25 years ago. A lot has changed since then.

I don’t need student loan forgiveness, but I support it. I also don’t need food stamps, housing subsidies, Medicaid, WIC, cash assistance, or any additional other social welfare benefit, but I sure as fuck support those programs, too.

Grad school loans are not federally subsidized since 2007. Prior to that there were subsidized loans available for grad school. I took out only subsidized loans for undergrad and grad school from 1997 - 2004. I looked up my loans today - they were subsidized the entire time I was in grad school and 6 months afterwards which is when I began repayment.

I started my MBA in 2010 and was still able to get some subsidized federal loans, they were just capped. Once I reached the cap, I had to take unsubsidized for the rest.

[sent]

A lot of the arguments I hear from the Chads are that “no one forced you to take the loans. You were an adult at 18 for college and 22+ for grad school and should have known and researched the consequences for signing for them.” The Chads do seem to be slightly appeased if the interest on the loans could be deducted on incomes higher than $80K or whatever the limit is.

I am ok with some forgiveness even if I won’t benefit. I got very lucky with my schooling and timing for many reasons, one of which is because my parents “anti-Red shirt” me (different topic, but relevant here) so I graduated high school at 17. We all know financial literacy in this country is atrocious so I don’t think it’s right that we expect an 18 year old to understand the consequences of a $2000 monthly loan payment for the next 30 years. Especially when we were raised hearing the “go to college if you don’t want a life of flipping burgers” illusion. Schools are just as predatory. They have no incentive to help the 18 or 22 year old understand the consequences of loan repayment. So many professional schools have popped up since the limitless loans began to cash in on this mess.

I’d like to think a revolution is coming, starting with the Great Resignation happening right now and spilling into the educational pipeline of us graduating people with unnecessary degrees while so many jobs that don’t need advanced training at the junior college and university levels go unfilled.

[taratru]

Dec 27, 2021 17:09:59 GMT -5 kadams767 said:

Dec 27, 2021 16:49:08 GMT -5 foundmylazybum said:

This is a very basic and broad question and please forgive my ignorance here, but when "people" say that loan forgiveness is "unfair" to some people, who is saying this and what do they mean?


I'm sorry if this a dumb question, but honestly, I don't have loans but believe that they are burdensome for so, so many in our country and am for like..blanket forgiveness. I haven't really looked into this except to say "I think we should forgive loan's and reduce college costs, it's ridiculous."

When I hear the "it's unfair!" Statement I always imagine it's a middle aged white guy ned Chad who thinks he paid for college through "hard work" and "moxie!"

And he doesn't want loan forgiveness bc he has on massive blinders and still thinks the world is unfair to him.

But really, nothing has been unfair to him, and in reality loan forgiveness would be the first fucking step of "fairness" to EVERYONE ELSE besides Chad.


But maybe that's just me.

Is it?

So this is NOT my personal POV, as I've mentioned up thread that I don't care at all if people get all or a portion of their existing debt forgiven.  

But the arguments I've heard are that it's unfair to people who were "responsible".  And they make "responsible" out to be all sorts of people - those who took out loans but already paid them (or majority of them) back, those who worked their way through school and only had minimal loans, if any, those who went to cheaper schools to avoid loans, those who got "worthwhile" degrees and "good" jobs, and those who didn't go to school at all because they couldn't afford it.  

And the part that kills me? I did all that. I got the undergrad degree with no loans. I got the teaching job. I got the professional development to advancing my career (news flash: that's only more college - no other way, so masters degrees are my debt). I made my loan payments and have been making them for...since 2004.

And I still got screwed by PSLF. So did my H. Because the vast population of America. Doesn't. Actually. Value. Education. They only value the money that can be made from it.

People who think this way can just fuck off. First, I'd like them to teach for like...a month, then they can fuck off.

[redheadbaker]

I haven't read all the links posted. Have we even mentioned the predatory institutional loans from for-profit colleges?

www.nytimes.com/2021/03/25/business/for-profit-colleges-private-loans.html?smid=em-share

Ms. Campbell is one of hundreds of thousands of students who have borrowed directly from for-profit colleges. These direct-lending programs have proliferated in the last decade, and almost never come with the safeguards guaranteed by federal loans. The colleges can demand payments while students are still in school. They can withhold transcripts for nonpayment. They can impose onerous interest rates, reaching into the double digits.

Many students are unable to make their monthly payments, leaving their credit ruined and their financial and professional futures in grave doubt.

[onomatopoeia]

Dec 27, 2021 20:37:46 GMT -5 foundmylazybum said:

Well I'm going to say this:

And it's more of a value or a concept than any sort of solution.


A lot of times we (americans) seem to have this moral ideal that it's important to somehow suffer in some way, form or fashion before we find comfort.

I will never forget a poster back in the olden days (on TN) who was struggling paying her mortgage. This was at peak recession, I think her DH had been laid off or at least downsized.  Their bank wouldn't work with them and they couldn't sell their house. They had a barebones budget and her only splurge in over 6 months was a new pair of running shoes because running was how she stayed fit/sane. She mentioned how they had considered just walking away from their house and moving across country to live with family (something like that). Other posters flamed her to high hell for even considering it, and because how dare she splurge on a new pair of shoes when she had a responsibility to her mortgage. Like shoes = a mortgage payment. 

Anyway, I paid my way through college and had school loans.  It was a struggle but I paid them off. I still support loan forgiveness (or at least no-interest loans, omg why can't we at least do THAT?). 

[jlt19]

I am all for cancelling the debt, but I really hope that the reason this all continues to be drug out is because they're working on a way for it to not happen again. As soon as it's wiped clean, there will be millions more the next month back in the hole. I think a good first step would be looking at capping (or removing) interest rates at the Fed rate or something.

[AJL]

What incentive does the federal government have to cancel out student loan debt? Serious question.

[seeyalater52]

Dec 28, 2021 12:35:03 GMT -5 AJL said:

What incentive does the federal government have to cancel out student loan debt? Serious question.

It’s a massive amount of economic stimulus. Like, really massive.

A major part of this crisis was caused by the federal government’s federal loan policies, so I do think they bear some responsibility to fix it, or at least to massively alleviate the big problem they helped to create and perpetuate.

[lacey]

I think reform needs to happen but I think it’s important for it to happen in context of reform for the future as well. I would rather see interest forgiven on current loans and all future interest for federal loans be 0% than to see interest and the original loan balance on current loans forgiven but have next years kids graduating with their loan balance and 6.8% interest again.

If we are not addressing the root cause of the problem and it’s just a one time stimulus to the economy I don’t think student loan forgiveness is the stimulus I would advocate for, but I’m also not going to protest it.

[weetabix]

Dec 27, 2021 22:23:17 GMT -5 sent said:

A lot of the arguments I hear from the Chads are that “no one forced you to take the loans. You were an adult at 18 for college and 22+ for grad school and should have known and researched the consequences for signing for them.” The Chads do seem to be slightly appeased if the interest on the loans could be deducted on incomes higher than $80K or whatever the limit is.

I am ok with some forgiveness even if I won’t benefit. I got very lucky with my schooling and timing for many reasons, one of which is because my parents “anti-Red shirt” me (different topic, but relevant here) so I graduated high school at 17. We all know financial literacy in this country is atrocious so I don’t think it’s right that we expect an 18 year old to understand the consequences of a $2000 monthly loan payment for the next 30 years. Especially when we were raised hearing the “go to college if you don’t want a life of flipping burgers” illusion. Schools are just as predatory. They have no incentive to help the 18 or 22 year old understand the consequences of loan repayment. So many professional schools have popped up since the limitless loans began to cash in on this mess.

I’d like to think a revolution is coming, starting with the Great Resignation happening right now and spilling into the educational pipeline of us graduating people with unnecessary degrees while so many jobs that don’t need advanced training at the junior college and university levels go unfilled.

One other argument I've also heard as a corollary to the bolded, is that prospective students should know they'll never make enough to pay back their loans if they pursue XYZ degree, which is hugely problematic (as discussed above w/r/t music therapist) and also ignores that some programs historically didn't provide accurate information about job prospects and potential salaries. I'm referring specifically to law school, but I'd imagine this plays out in other fields as well.  When I was applying to law schools in 2005 and 2006, the school (a Tier 2 large state university) I ultimately attended reported to US News that its graduates had a 98.5 percent employment rate within a year of graduation, and some crazy inflated salary figures as well. Obviously, this was all pre-recession and in no way reflective of the job market I graduated into in 2009, but I seem to recall over the next few years that there was a huge push for schools to stop inflating their numbers to try to game the US News rankings, which were (are?) basically gospel for law schools. With respect to law schools, my understanding is that certain schools (likely including my own) found a way to only include salaries of those in big law (discussions about the bimodal distribution of legal salaries get at why this is such a problem) while counting all jobs, regardless of whether or not they were legal, to make themselves look as good as possible so students would pile up debt based on skewed data - taking out $150K in debt doesn't sound so bad if you're told that your starting salary will be in that range, but the reality is that level of pay was not attainable for most new graduates from most schools outside the very top tier. Like I said, I *think* there has been something of a reckoning with these practices, but I'm not certain, and even if there has, there are still lots of people walking around with tons of debt based on inaccurate information.  

Anyway, all of that to say, loans should be forgiven.

[ESF]

Dec 28, 2021 8:40:08 GMT -5 redheadbaker said:

I haven't read all the links posted. Have we even mentioned the predatory institutional loans from for-profit colleges?

www.nytimes.com/2021/03/25/business/for-profit-colleges-private-loans.html?smid=em-share

Ms. Campbell is one of hundreds of thousands of students who have borrowed directly from for-profit colleges. These direct-lending programs have proliferated in the last decade, and almost never come with the safeguards guaranteed by federal loans. The colleges can demand payments while students are still in school. They can withhold transcripts for nonpayment. They can impose onerous interest rates, reaching into the double digits.

Many students are unable to make their monthly payments, leaving their credit ruined and their financial and professional futures in grave doubt.

This OMG this.

I cannot with the people who are against student loan forgiveness because they think it's going to be a windfall to some random kid who borrowed $200k to major in All the Feels at Super Expensive Unicorn School of Art and Rainbows.  For the love of all things holy, stop getting your news about cultural trends from the sheltered dickbots that write clickbait headlines and learn some real facts.

The reality is that the huge pre-interest amounts of student loans for undergraduate degrees basically don't really exist.  This Brookings paper notes that 6% of all borrowers owe more than $100k. While it doesn't break down grad versus undergrad, it suggests that due to caps on borrowering, that 6% is probably largely graduate.  It also focuses on what is owed as opposed to what was borrowed.  An undergrad who borrows $70k but gets a full ride to medical school could easily wind up with $100k in debt at the end simply from the interest piling up through many years of deferments. 

So at the end of the day, you've got some small number of graduate degree holders and some completely miniscule number of undergrad degree holders that have these huge amounts. And yet certain people in this thread can't stop posting about this epidemic.  FFS.

While we can all argue until we are blue in the face as to whether these people should have to pay these loans, at the end of the day, IT DOESN'T FUCKING MATTER. This tiny minority of kids is a red herring.  They should not be the be all and end all of a policy discussion about the other 94% of people who don't fit into that category. That's like saying we shouldn't have food stamps because your neighbor's cousin saw someone in an Escalade buying lobster with them. Just stop.

So let's talk about that 94%. It's a huge mix of people borrowing for all kinds of things. But setting aside the tiny pool of high dollar graduate borrowers, generally, it's two groups of people: 

(1) those who stay current.  Seems like a lot of these are just average-joe college kids borrowing some mid-range amount, like $30k or $40k to go to public or private schools.  For some of these kids, depending on where they end up working and other things in their lives (kids, disabilities, etc), the monthly payments will be a hardship.  For others, it'll be fine.  Generally these people by and large stay current, and some may forgo other life things to make it happen.

(2) those who default. The majority are those going to community college and for profit colleges, and are also majority black - in large part because for profit colleges and scammy community colleges  prey on first generation college students, working and single moms, military vets, and other disadvantaged groups.  Of course, community college can and often is a good thing, but we don't talk enough about how many engage in misleading advertising around part time programs for working adults.  Those adults get enticed by what these programs promise, and due to the way federal student loans get disbursed, often inadavertently end up borrowing more than the cost of the degree, which winds up being harder than advertised to complete.

So this debate is not about the stoner burnout with a degree in rainbows. By making those people the center of this debate, people play into this idea that loan forgiveness is some culture war way of delivering resources to the elite at the expense of America's working class.  So just stop with that.

The reality is that the loan forgiveness is going to be a huge benefit to the working class, as those are the people whose lives get financially ruined after the promise of being a dental hygenist in just 18 months doesn't actually work out that way.

And ultimately, the DOE and taxpayers are subsidizing these scams. They are allowing them to tap into the federal student loan program without appropriate oversight all while knowing full well the predatory nature of their operations and the high risks of defaults.  When people default, taxpayers are on the hook.

Because of that, I think we have a moral obligation to get serious about forgiveness.  (We also have to get serious about cracking down on these schools, but that's a wall of text for a different day.)  

In general, I think it's easiest to wipe the slate clean and forgive it all, then move on to oversight reforms.  The first of which has to be to put the colleges on the hook for most or all of the defaults, which will have a free market impact of cleaning up the false advertising more quickly than regulators ever could. Then of course because I haven't changed at all, we have to ban arbitration clauses, so kids can sue again (pre-Trump, schools couldn't require arbitration if they were using federal student loan money, but now they can).

That said, there are compromises here that could get us a long way.  For example, a program that forgives only the first, say, $50k of what is borrowed, while also expanding avenues for people to seek loan forgiveness for other reasons (disabilities, fraud,etc) would result in relief being given to those who need it the most, while also providing some improvement to others.   Another proposal that I saw that strikes me as a possible option would be to forgive all interest but keeps the principal.  The devil would be in the details there, so it could be workable or a disaster, depending on how past interest payments were credited to principal and other considerations. 

Of course full forgiveness sounds great, but I think the misunderstanding about who benefits gives us a huge advantage here.  There are probably ways to draw a line on who gets what that give us 95% of what we want in exchange for us throwing the imaginary burnout students with their party degrees under the bus.

[isabel]

Dec 27, 2021 20:37:46 GMT -5 foundmylazybum said:

A lot of times we (americans) seem to have this moral ideal that it's important to somehow suffer in some way, form or fashion before we find comfort.

Yep. DH says often when we talk about my dad (who is Trump-supporting republican) that, in their words, "being poor should hurt." I think that idea extends to basically anyone below a certain income level and "sucks to be you" if you're struggling financially with anything.

[seeyalater52]

weetabix the other consideration is what abstract salaries sound like to teenagers, especially those who come from relative poverty. At 18 years old I saw starting salaries of $40,000 and it was more money than I ever could have conceived of. More than both my parents’ incomes combined supporting a family of 4. I had absolutely no sense of what it would cost to live a middle class lifestyle, never mind keep up with the rising cost of living, pay back loans, deductions for health insurance (never had that growing up) never mind saving for retirement … It’s easy to see a number on a page and assume you’ll be set for life when you have no context for what it would be like to support a different lifestyle than the one all your family members have lived for generations.

[NewOrleans]

Dec 28, 2021 13:52:41 GMT -5 lacey said:

I think reform needs to happen but I think it’s important for it to happen in context of reform for the future as well. I would rather see interest forgiven on current loans and all future interest for federal loans be 0% than to see interest and the original loan balance on current loans forgiven but have next years kids graduating with their loan balance and 6.8% interest again.

If we are not addressing the root cause of the problem and it’s just a one time stimulus to the economy I don’t think student loan forgiveness is the stimulus I would advocate for, but I’m also not going to protest it.

Why is it a one-time stimulus? I’ve heard that phrase 2-3 times in this thread. Isn’t it decades-long?  

[seeyalater52]

Dec 28, 2021 19:31:50 GMT -5 NewOrleans said:

Dec 28, 2021 13:52:41 GMT -5 lacey said:

I think reform needs to happen but I think it’s important for it to happen in context of reform for the future as well. I would rather see interest forgiven on current loans and all future interest for federal loans be 0% than to see interest and the original loan balance on current loans forgiven but have next years kids graduating with their loan balance and 6.8% interest again.

If we are not addressing the root cause of the problem and it’s just a one time stimulus to the economy I don’t think student loan forgiveness is the stimulus I would advocate for, but I’m also not going to protest it.

Why is it a one-time stimulus? I’ve heard that phrase 2-3 times in this thread. Isn’t it decades-long?  

Correct. That’s part of what makes it so powerful even if it is a limited tool and doesn’t (by itself) solve the root problem.

[redheadbaker]

Dec 28, 2021 18:26:07 GMT -5 seeyalater52 said:

weetabix the other consideration is what abstract salaries sound like to teenagers, especially those who come from relative poverty. At 18 years old I saw starting salaries of $40,000 and it was more money than I ever could have conceived of. More than both my parents’ incomes combined supporting a family of 4. I had absolutely no sense of what it would cost to live a middle class lifestyle, never mind keep up with the rising cost of living, pay back loans, deductions for health insurance (never had that growing up) never mind saving for retirement … It’s easy to see a number on a page and assume you’ll be set for life when you have no context for what it would be like to support a different lifestyle than the one all your family members have lived for generations.

My family NEVER talked about money. We weren't rich -- my dad was a cop, my mom stayed at home with me and my brother, and went back to work when I was old enough to walk us home from school and watch him until my mom got home. When she did go back to work, she did admin work. But they never talked about salaries. So, when I was offered $28K in my first job after college, I thought that sounded like A LOT. 

[lacey]

Dec 28, 2021 19:31:50 GMT -5 NewOrleans said:

Dec 28, 2021 13:52:41 GMT -5 lacey said:

I think reform needs to happen but I think it’s important for it to happen in context of reform for the future as well. I would rather see interest forgiven on current loans and all future interest for federal loans be 0% than to see interest and the original loan balance on current loans forgiven but have next years kids graduating with their loan balance and 6.8% interest again.

If we are not addressing the root cause of the problem and it’s just a one time stimulus to the economy I don’t think student loan forgiveness is the stimulus I would advocate for, but I’m also not going to protest it.

Why is it a one-time stimulus? I’ve heard that phrase 2-3 times in this thread. Isn’t it decades-long?  

I understand that it is continued stimulus for those who have their loans forgiven. What about the kids who graduate in 2 years (or 5 years or 10 years) and have student loans? Are those forgiven as well? I would prefer a reformation that is sustainable. If that’s free college for everyone by forgiving existing loans and making college free in the future, great! If that’s forgiving a certain amount of debt and proving grants in the future, cool! If that’s making all student loans have 0% interest, fabulous! Or a million other combinations of things for both current loan holders and future students. I’m much less interested in forgiving all debt for current loan holders and having the same multi-trillion dollar problem in 20 years because we didn’t actually fix anything about the cost of higher education. That’s me. This isn’t my hill to die on.

[NewOrleans]

Dec 28, 2021 21:24:16 GMT -5 lacey said:

Dec 28, 2021 19:31:50 GMT -5 NewOrleans said:

Why is it a one-time stimulus? I’ve heard that phrase 2-3 times in this thread. Isn’t it decades-long?  

I understand that it is continued stimulus for those who have their loans forgiven. What about the kids who graduate in 2 years (or 5 years or 10 years) and have student loans? Are those forgiven as well? I would prefer a reformation that is sustainable. If that’s free college for everyone by forgiving existing loans and making college free in the future, great! If that’s forgiving a certain amount of debt and proving grants in the future, cool! If that’s making all student loans have 0% interest, fabulous! Or a million other combinations of things for both current loan holders and future students. I’m much less interested in forgiving all debt for current loan holders and having the same multi-trillion dollar problem in 20 years because we didn’t actually fix anything about the cost of higher education. That’s me. This isn’t my hill to die on.

Sure.  There are 2 arms here: forgiveness and reform, and attending to both matters.  I just don’t think it’s accurate to define/present debt cancellation as a one-time stimulus event.

[ESF]

Dec 28, 2021 18:26:07 GMT -5 seeyalater52 said:

weetabix the other consideration is what abstract salaries sound like to teenagers, especially those who come from relative poverty. At 18 years old I saw starting salaries of $40,000 and it was more money than I ever could have conceived of. More than both my parents’ incomes combined supporting a family of 4. I had absolutely no sense of what it would cost to live a middle class lifestyle, never mind keep up with the rising cost of living, pay back loans, deductions for health insurance (never had that growing up) never mind saving for retirement … It’s easy to see a number on a page and assume you’ll be set for life when you have no context for what it would be like to support a different lifestyle than the one all your family members have lived for generations.

Also….what 18 year old sees a wage or salary number and really sits down and compares options and what each option means for them financially in five or ten or fifty years?

College kids aren’t really the exception here. Kids who don’t go to college are probably not universally sitting down in eleventh grade and doing a cost-benefit analysis of being a plumber versus auto repair and what the union options are and what the state licensing requirements are and what all these things mean for their ability to pay for day care or get a pension.


Who the joins the military with a plan for what they do once they get out?

Do we think a rich kid whose dad pays for college is selecting a major based on the odds of dad gets busted up by the feds for tax evasion and has all assets seized?

What about the ones who change their majors? These anecdotes about the random college kid who is so wise and moral and dutiful that he does everything right and picks a responsible major and a reasonably priced state school and never waivers and gets the same perfect good paying job he planned to have when he started are all kind of bullshit to me, tbh. Or maybe are just about a very specific kind of kid. Other kids - like most people I know - get out of high school and enter the next phase of their life - whether it be college or a new job or relationship or the military or anything and find a whole fucking brand new world of opportunities and things to learn and worlds to discover and people from all sorts of different and new backgrounds, with ideas and experiences to share, who inspire and motivate and challenge. And the script goes out the window - as well it should!

The reality is that it’s impossible for 18 year olds to make a sure lifetime financial bet that they never abandon, regardless of their field or the options they are weighing. This isn’t only a matter of financial literacy or class obstacles - though those obviously play a huge part. It’s also that there are just too many variables at that age and too many variables in the years that immediately follow. It just can’t be done. We shouldn’t even want it to be done. Frankly, I suspect it’s not actually being done in any place but the imaginations of the bootstrap obsessed.

[seeyalater52]

Dec 28, 2021 23:00:31 GMT -5 ESF said:

Dec 28, 2021 18:26:07 GMT -5 seeyalater52 said:

weetabix the other consideration is what abstract salaries sound like to teenagers, especially those who come from relative poverty. At 18 years old I saw starting salaries of $40,000 and it was more money than I ever could have conceived of. More than both my parents’ incomes combined supporting a family of 4. I had absolutely no sense of what it would cost to live a middle class lifestyle, never mind keep up with the rising cost of living, pay back loans, deductions for health insurance (never had that growing up) never mind saving for retirement … It’s easy to see a number on a page and assume you’ll be set for life when you have no context for what it would be like to support a different lifestyle than the one all your family members have lived for generations.

Also….what 18 year old sees a wage or salary number and really sits down and compares options and what each option means for them financially in five or ten or fifty years?

College kids aren’t really the exception here. Kids who don’t go to college are probably not universally sitting down in eleventh grade and doing a cost-benefit analysis of being a plumber versus auto repair and what the union options are and what the state licensing requirements are and what all these things mean for their ability to pay for day care or get a pension.


Who the joins the military with a plan for what they do once they get out?

Do we think a rich kid whose dad pays for college is selecting a major based on the odds of dad gets busted up by the feds for tax evasion and has all assets seized?

What about the ones who change their majors? These anecdotes about the random college kid who is so wise and moral and dutiful that he does everything right and picks a responsible major and a reasonably priced state school and never waivers and gets the same perfect good paying job he planned to have when he started are all kind of bullshit to me, tbh. Or maybe are just about a very specific kind of kid. Other kids - like most people I know - get out of high school and enter the next phase of their life - whether it be college or a new job or relationship or the military or anything and find a whole fucking brand new world of opportunities and things to learn and worlds to discover and people from all sorts of different and new backgrounds, with ideas and experiences to share, who inspire and motivate and challenge. And the script goes out the window - as well it should!

The reality is that it’s impossible for 18 year olds to make a sure lifetime financial bet that they never abandon, regardless of their field or the options they are weighing. This isn’t only a matter of financial literacy or class obstacles - though those obviously play a huge part. It’s also that there are just too many variables at that age and too many variables in the years that immediately follow. It just can’t be done. We shouldn’t even want it to be done. Frankly, I suspect it’s not actually being done in any place but the imaginations of the bootstrap obsessed.

Slow clap. Yes. All this.

[sakoro]

Dec 28, 2021 23:00:31 GMT -5 ESF said:

Dec 28, 2021 18:26:07 GMT -5 seeyalater52 said:

weetabix the other consideration is what abstract salaries sound like to teenagers, especially those who come from relative poverty. At 18 years old I saw starting salaries of $40,000 and it was more money than I ever could have conceived of. More than both my parents’ incomes combined supporting a family of 4. I had absolutely no sense of what it would cost to live a middle class lifestyle, never mind keep up with the rising cost of living, pay back loans, deductions for health insurance (never had that growing up) never mind saving for retirement … It’s easy to see a number on a page and assume you’ll be set for life when you have no context for what it would be like to support a different lifestyle than the one all your family members have lived for generations.

Also….what 18 year old sees a wage or salary number and really sits down and compares options and what each option means for them financially in five or ten or fifty years?

College kids aren’t really the exception here. Kids who don’t go to college are probably not universally sitting down in eleventh grade and doing a cost-benefit analysis of being a plumber versus auto repair and what the union options are and what the state licensing requirements are and what all these things mean for their ability to pay for day care or get a pension.


Who the joins the military with a plan for what they do once they get out?

Do we think a rich kid whose dad pays for college is selecting a major based on the odds of dad gets busted up by the feds for tax evasion and has all assets seized?

What about the ones who change their majors? These anecdotes about the random college kid who is so wise and moral and dutiful that he does everything right and picks a responsible major and a reasonably priced state school and never waivers and gets the same perfect good paying job he planned to have when he started are all kind of bullshit to me, tbh. Or maybe are just about a very specific kind of kid. Other kids - like most people I know - get out of high school and enter the next phase of their life - whether it be college or a new job or relationship or the military or anything and find a whole fucking brand new world of opportunities and things to learn and worlds to discover and people from all sorts of different and new backgrounds, with ideas and experiences to share, who inspire and motivate and challenge. And the script goes out the window - as well it should!

The reality is that it’s impossible for 18 year olds to make a sure lifetime financial bet that they never abandon, regardless of their field or the options they are weighing. This isn’t only a matter of financial literacy or class obstacles - though those obviously play a huge part. It’s also that there are just too many variables at that age and too many variables in the years that immediately follow. It just can’t be done. We shouldn’t even want it to be done. Frankly, I suspect it’s not actually being done in any place but the imaginations of the bootstrap obsessed.

All of this! And what about changes in fields/ career paths/ salary/ industry stability that said 18 year old could never foresee? That’s the major flaw with incenting some majors over others.

Example: in the 1990s, we knew journalism wasn’t going to be the best paying major, but we thought it would lead to a stable career path and a steady salary. Not so much in the 2020s.

Counterexample: Statistics/ data was considered a stable career but not at the top of salary scales in the 1990s. Now with big data, everyone and their mother is studying data science.

[aprilsails]

I’m in Canada so I have no skin in this game but I am constantly shocked at the interest rates that are thrown about related to student debt. They are sky high compared to the current rates of return on investments and the central bank lending rates. I obtained loans through OSAP, where loans were given out by the province based on parental and summer job income. In 2003-2007 they would lend up to 15k a year with a maximum payback of $7500 (meaning anything above $7500 was considered a grant and did not need to be repaid). I usually got between $11k-13k per year and graduated with $28,000 in student loans. The rate is tied to the prime lending rate +1%, which is currently a pretty reasonable 2.75%. There is no interest accrued or payments required while registered in studies, whether your undergrad or graduate degrees, in province or even out of the country. You do not need to start paying until 6 months after you are done school.

Also the idea that any student can be certain of their job prospects on graduation is laughable. DH went through a computer programming course and many of his classmates opted to do the coop program, and paid extra to graduate one year later. That year was 2008 and none of them got jobs. DH was lucky he wasn’t laid off after being a fresh hire in 2007. Now they are dying for computer programmers locally and they can get hired in a minute and ask for the moon. That will likely all change in another 10 years.

[kadams767]

Dec 29, 2021 10:33:38 GMT -5 aprilsails said:

I’m in Canada so I have no skin in this game but I am constantly shocked at the interest rates that are thrown about related to student debt. They are sky high compared to the current rates of return on investments and the central bank lending rates. I obtained loans through OSAP, where loans were given out by the province based on parental and summer job income. In 2003-2007 they would lend up to 15k a year with a maximum payback of $7500 (meaning anything above $7500 was considered a grant and did not need to be repaid). I usually got between $11k-13k per year and graduated with $28,000 in student loans. The rate is tied to the prime lending rate +1%, which is currently a pretty reasonable 2.75%. There is no interest accrued or payments required while registered in studies, whether your undergrad or graduate degrees, in province or even out of the country. You do not need to start paying until 6 months after you are done school.

Also the idea that any student can be certain of their job prospects on graduation is laughable. DH went through a computer programming course and many of his classmates opted to do the coop program, and paid extra to graduate one year later. That year was 2008 and none of them got jobs. DH was lucky he wasn’t laid off after being a fresh hire in 2007. Now they are dying for computer programmers locally and they can get hired in a minute and ask for the moon. That will likely all change in another 10 years.

Others have touched on it in this thread, but the interest rates on federal student loans did not used to be this high and they weren't always fixed.  I am not sure what the rates look like now or in the past few years, but in 2006-2007 there was a dramatic increase in the rates and the feds put a fixed floor of 6.8% in place at that time.  For reference, I was in my last year of law school at that time, and for three years of law school loans, my rates were 2.77%, 4.7% and 6.8%.  That's a 4% increase in under 3 years.  So, yes, I signed up for a significant amount of debt to pay for school, but I did it on the assumption that it was gong to be relatively low interest since it was supposed to be variable rate and at least somewhat tied to market interest rates.  A fixed rate of 6.8% is absurd, and it stayed that way until 2012.  For reference, I had 3 mortgages between 2006 and 2012 and none of them were over 5.2%.  A significantly higher interest rate for government-provided student loan debt that can never be discharged is unconscionable.  

[sent]

This doesn't seem like a tough issue to fix. Step 1, lower the interest rate. Step 2, cap Federal loans. Step 3, things will sort themselves out. Seems like if there is money to be made, the private lenders would come back. You can still major in rainbows, but you may have to choose a less expensive school or commute from home over dorming at the high priced fancy school. Put in some framework to phase in the loan limits so those who are already at expensive schools can finish there.

And also forgive $50K for now to help everyone who had to borrow at the higher rates between 2007 - 2021.

[Jalapeñomel]

Dec 29, 2021 12:49:16 GMT -5 sent said:

This doesn't seem like a tough issue to fix. Step 1, lower the interest rate. Step 2, cap Federal loans. Step 3, things will sort themselves out. Seems like if there is money to be made, the private lenders would come back. You can still major in rainbows, but you may have to choose a less expensive school or commute from home over dorming at the high priced fancy school. Put in some framework to phase in the loan limits so those who are already at expensive schools can finish there.

And also forgive $50K for now to help everyone who had to borrow at the higher rates between 2007 - 2021.

Fixed that: And also forgive $50K for now to help everyone.

[Susie]

Dec 29, 2021 11:43:48 GMT -5 kadams767 said:

Dec 29, 2021 10:33:38 GMT -5 aprilsails said:

I’m in Canada so I have no skin in this game but I am constantly shocked at the interest rates that are thrown about related to student debt. They are sky high compared to the current rates of return on investments and the central bank lending rates. I obtained loans through OSAP, where loans were given out by the province based on parental and summer job income. In 2003-2007 they would lend up to 15k a year with a maximum payback of $7500 (meaning anything above $7500 was considered a grant and did not need to be repaid). I usually got between $11k-13k per year and graduated with $28,000 in student loans. The rate is tied to the prime lending rate +1%, which is currently a pretty reasonable 2.75%. There is no interest accrued or payments required while registered in studies, whether your undergrad or graduate degrees, in province or even out of the country. You do not need to start paying until 6 months after you are done school.

Also the idea that any student can be certain of their job prospects on graduation is laughable. DH went through a computer programming course and many of his classmates opted to do the coop program, and paid extra to graduate one year later. That year was 2008 and none of them got jobs. DH was lucky he wasn’t laid off after being a fresh hire in 2007. Now they are dying for computer programmers locally and they can get hired in a minute and ask for the moon. That will likely all change in another 10 years.

Others have touched on it in this thread, but the interest rates on federal student loans did not used to be this high and they weren't always fixed.  I am not sure what the rates look like now or in the past few years, but in 2006-2007 there was a dramatic increase in the rates and the feds put a fixed floor of 6.8% in place at that time.  For reference, I was in my last year of law school at that time, and for three years of law school loans, my rates were 2.77%, 4.7% and 6.8%.  That's a 4% increase in under 3 years.  So, yes, I signed up for a significant amount of debt to pay for school, but I did it on the assumption that it was gong to be relatively low interest since it was supposed to be variable rate and at least somewhat tied to market interest rates.  A fixed rate of 6.8% is absurd, and it stayed that way until 2012.  For reference, I had 3 mortgages between 2006 and 2012 and none of them were over 5.2%.  A significantly higher interest rate for government-provided student loan debt that can never be discharged is unconscionable.  

I was in the same boat, finished law school in 2007 with loans from my 3L year at, surprise!, 6.8%, after starting in 2004 in the 2%'s.  I think 6.8% was even the reduced rate after a rate reduction for using auto-debit!  

I didn't see quite the same decoupling from mortgage rates; I bought a house in 2008 at 6.125% (refinanced in 2010 to 4.375% and again in 2019 to 3.25%).  But I do think those interest rates are INSANE for debt that is non-dischargeable in bankruptcy.  Absolute highway robbery.

[StrawberryBlondie]

Dec 29, 2021 15:40:07 GMT -5 Susie said:

Dec 29, 2021 11:43:48 GMT -5 kadams767 said:

Others have touched on it in this thread, but the interest rates on federal student loans did not used to be this high and they weren't always fixed.  I am not sure what the rates look like now or in the past few years, but in 2006-2007 there was a dramatic increase in the rates and the feds put a fixed floor of 6.8% in place at that time.  For reference, I was in my last year of law school at that time, and for three years of law school loans, my rates were 2.77%, 4.7% and 6.8%.  That's a 4% increase in under 3 years.  So, yes, I signed up for a significant amount of debt to pay for school, but I did it on the assumption that it was gong to be relatively low interest since it was supposed to be variable rate and at least somewhat tied to market interest rates.  A fixed rate of 6.8% is absurd, and it stayed that way until 2012.  For reference, I had 3 mortgages between 2006 and 2012 and none of them were over 5.2%.  A significantly higher interest rate for government-provided student loan debt that can never be discharged is unconscionable.  

I was in the same boat, finished law school in 2007 with loans from my 3L year at, surprise!, 6.8%, after starting in 2004 in the 2%'s.  I think 6.8% was even the reduced rate after a rate reduction for using auto-debit!  

I didn't see quite the same decoupling from mortgage rates; I bought a house in 2008 at 6.125% (refinanced in 2010 to 4.375% and again in 2019 to 3.25%).  But I do think those interest rates are INSANE for debt that is non-dischargeable in bankruptcy.  Absolute highway robbery.

I graduated law school in 2006 so my interest on my federal loans was ok, not amazing (last year was something like 5-6% vs the 2-3% I had in years 1 & 2) but interest really went up right before I would've consolidated. If I'd graduated a year or two early I could've consolidated at something like 2.5%.

Things ultimately worked out ok for me because refinancing became a possibility and i have really good credit so I got a really good rate and should have everything paid off in about 5 years. But it was a really tough first 5-7 years out of school.