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Equity in student loan debt forgiveness or don't forgive student loan debt?

What should we do about student loan debt forgiveness with equity?


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neil

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If we should have things like student loan debt forgiveness and equity with student loan debt forgiveness, then that would (also) mean that:
  • students who have partially or fully paid student loans ought to get reimbursed for the amount they paid off
  • students who didn't use student loans ought to get reimbursed for what they paid for their education
  • those who decided not to continue education after high school that involves a student loan to avoid getting into student debt ought to get compensated for what they would have paid for it
So should we do this, or should we simply not have student loan debt forgiveness?
 

ApersonLIKEallOFyou

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If we should have things like student loan debt forgiveness and equity with student loan debt forgiveness, then that would (also) mean that:
  • students who have partially or fully paid student loans ought to get reimbursed for the amount they paid off
  • students who didn't use student loans ought to get reimbursed for what they paid for their education
  • those who decided not to continue education after high school that involves a student loan to avoid getting into student debt ought to get compensated for what they would have paid for it
So should we do this, or should we simply not have student loan debt forgiveness?
This whole thing is a mess and I'm not sure there is a good way out of it. But to begin, when you say "equity", what do you mean?
 

Napoleon

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I voted no because there isn’t an “other” option. I’m fine with forgiving student loan debt for STEM graduates, but if you racked up $100,000 in debt to major in extraterrestrial interpretive dance then WOMP.
 

Artymoon

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A student loan is a contract, a promise to fulfill an obligation entered into willingly by two parties. Inability or unwillingness to follow through on one's obligation has a known consequence that was understood prior to signing on the dotted line. This notion of debt forgiveness is nothing more than vote buying. The only thing I suppose we can do is call it out for what it is and vote what you believe is right.
 

neil

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This whole thing is a mess and I'm not sure there is a good way out of it. But to begin, when you say "equity", what do you mean?
Well, I showed exactly what I mean with the bullet list, but I'm guessing that's not what you're asking about; I'm sure you're aware of how certain politically minded folks like to talk about having equity (in a political or social context) - or are you not familiar with this issue? I'm simply taking this same principle and applying it to a situation where I have not yet seen it applied, which is student loan debt forgiveness & what I would like to know is which direction do people prefer to go in.
 

ApersonLIKEallOFyou

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Well, I showed exactly what I mean with the bullet list, but I'm guessing that's not what you're asking about; I'm sure you're aware of how certain politically minded folks like to talk about having equity (in a political or social context) - or are you not familiar with this issue? I'm simply taking this same principle and applying it to a situation where I have not yet seen it applied, which is student loan debt forgiveness & what I would like to know is which direction do people prefer to go in.
Just making sure I got what you meant.

Point 1: "students who have partially or fully paid student loans ought to get reimbursed for the amount they paid off"

I think this would have to be how it's done. There will be a lot of pissed off people who are going to feel like they got screwed by paying off their loans. And to the politicians making the call: This will not be Democrat vs. Republican issue. People on both sides would get burned and we all know how to lazy politicians don't like dealing with that.

Point 2: "students who didn't use student loans ought to get reimbursed for what they paid for their education"

This one is tough. Because now we're venturing into the taxpayers outright paying for higher education, rather than simply forgiving loans. It could be argued that it's the same thing, but it's not since there are obviously people who paid for their education rather than taking out loans.

Point 3: "those who decided not to continue education after high school that involves a student loan to avoid getting into student debt ought to get compensated for what they would have paid for it"

This one is nearly impossible and a great example of why this is all such a mess. The existence of government-backed student loans is a reason why college is so expensive in the first place so I can understand the motivation behind this point. But how could we ever calculate it? Could I just say I would have gone to Harvard if it wasn't so expensive so I deserve a check for $200,000?

Also, we need a backstop against what the colleges and universities are about to perceive. They are about to see the government swoop in and pay for it all. Will that incentivize them to make their product cheaper knowing the taxpayer will pick up the tab? Hell no. So do we maybe say:
Ok, all loans are forgiven. The government will no longer back any student loans. And a law be passed, maybe even an amendment or something that major, that the government will not be allowed to be involved in student loans for 100 years or something? The only way the colleges are going to get realistic about their prices is if the money supply dries up a bit. Government-backed student loans have essentially had an inflationary role in college pricing.
 
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We (the US govt) should stop loaning people money for college. The rest will solve itself.
Yeah, lets all be uneducated idiots like right wingers. Not many people, even from middle class families, could afford the cost of education these days, without loans
 

VanceMack

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1-I am opposed to debt/deficit spending. However...
2-IF the government is going to continue to spend money like drunken sailors in a foreign port, then I think forgiving student loan debt in its entirety is a great idea. I would MUCH rather see a 'stimulus' plan that frees up income to be spent in the economy than more 'stimulus' plans that toss bread crumbs to citizens so they will keep their mouths shut while the government gives out hundreds of billions in your grandchildren money to foreign governments and political causes.
3-I would say the same thing about certain applicable mortgages.
4-We are either serious about debt/deficit spending or we arent....and we definitely arent
5-If the government pays off student loan debt they should at the same time forever alter the student loan program and instead make the Universities the primary debt holder when a student loan is issued. That would cause the universities to actually be competitive where college attendance is concerned and to assume the risk for the students brought into the system that have no business being there.
 

Felis Leo

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If we should have things like student loan debt forgiveness and equity with student loan debt forgiveness, then that would (also) mean that:
  • students who have partially or fully paid student loans ought to get reimbursed for the amount they paid off
  • students who didn't use student loans ought to get reimbursed for what they paid for their education
  • those who decided not to continue education after high school that involves a student loan to avoid getting into student debt ought to get compensated for what they would have paid for it
So should we do this, or should we simply not have student loan debt forgiveness?

I am not for blanket loan forgiveness because it does not take into account the individual circumstances of any borrower. For a person who has little to no ability to pay the loan back (especially for these ridiculous "Parent-Plus loans"), I think that relieving that person of their debts and getting that debt of the government's books is fine. For people who earned their degrees and are making high six-figure salaries (or more), blanket loan forgiveness may be an inequitable windfall. I think every person's individual circumstances should be examined and not assumed.

What would be equitable would be to go back to the pre-2005 bankruptcy code's treatment of student loan debt. Prior to the passage of 2005's Bankruptcy Abuse Prevention and Consumer Protection Act, student loan debts were dischargeable if one filed for Chapter 13 Bankruptcy and paid their disposable monthly income into a five-year repayment plan. Any remaining student loan debt was thereafter discharged. That is the equitable solution. Because any person who files must be examined individually by a Chapter 13 Trustee assigned by the Department of Justice, and the filing party must disclose their income from all sources and pay their disposable monthly income beyond their necessities. For those students who are making enough money, they can pay back their debts. For those who are struggling, or were unable to attain their degrees but took on debt, they would be allowed relief under the bankruptcy code.

As far as I am concerned, student loan debt is not something sacred that should remain collectible into perpetuity in the same manner of criminal fines, unpaid payroll taxes, unpaid child support, etc., etc. It is just consumer debt. No different from government-backed mortgages. The government should go back to treating it like that.
 
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mrjurrs

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By equity do you mean this?
1650648787866.png


Or do you mean equally?

If you meant equity as in the image, I vote yes. If you meant equity as equally, I vote no. Foe example, anyone that got into a name college on a fake crew scholarship should not have their loans forgiven.
 

Felis Leo

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If Donald Trump can avoid debts by declaring bankruptcy, why can't a kid with a student loan do the same?

I agree. The Bankruptcy Code should be amended with regard to student loans to make them dischargeable once again like they were pre-2005, just like any other consumer debt.

But I am against a blanket forgiveness of the taxpayer eating student loan debt of those who can repay them with relative ease. If you went to the Juilliard School and got your Bachelors and Masters in Music Theory for $300,000.00, and are making $50,000.00 a year at a charter school as a music teacher, then you should damn well be able to file for bankruptcy since there is no way you can service your debts and meet your necessary living expenses simultaneously. But if you went to UCLA School of Medicine and left owing $300,000.00 but you are an MD making $500,000.00 per year? Yeah, no. You should repay your student loans.
 
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Gatsby

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I'm leaning toward not forgiving student debt. It's both regressive and inflationary.

If Biden wants to do something, he could forgive just the accumulated interest. And keep the zero-interest rate going forward, so that inflation eats away at the principal.
 

ApersonLIKEallOFyou

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I'm leaning toward not forgiving student debt. It's both regressive and inflationary.

If Biden wants to do something, he could forgive just the accumulated interest. And keep the zero-interest rate going forward, so that inflation eats away at the principal.
I kinda like this. Except for people, like my wife, who refinanced their loans for a better rate and are currently missing out on the 0%. What happens to them?
 

rickc

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Free secondary education is offered in many countries around the world.

Maybe if we had free secondary education we wouldn't have so many dumb assed trumpers.
 

Ethel2

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Yeah, lets all be uneducated idiots like right wingers. Not many people, even from middle class families, could afford the cost of education these days, without loans
Loans are fine. However the expectation and requirement should be the same as for every other loan-you repay it under the terms agreed to.
 

BahamaBob

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I don't have any student debt, but I still owe on my Bentley. Can I have my loan forgiveness transferred?

The real question is. Since a college grad will earn a million dollars more during his lifetime, why should the 63% of the country that doesn't have a degree pay for those who do?

A college education is an investment. As with any investment, some are good some are bad. However, no one is forced to borrow money to make that investment. In addition, no one else should be liable for your investment decisions.
 
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