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What is the rationale behind forgiving $250 billion in student debt?

What is the rationale behind forgiving around $320 billion in student debt?


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jaypatriot

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Biden is considering cancelling $321 billion in federal student loans.
That's a lot more than the estimated reduction in federal debt projected as a result of the recently signed Inflation Reduction Act. And no one can figure out if the cancellation of that debt is inflationary or not.
Keep in mind these are college students getting a higher education so they can become responsible adults.
Full disclosure: I am biased because a few years ago I paid off a $64,000 student loan debt for a doctoral program. And it hurt.

How do people worried about our financial future feel about all of that?


Student loan forgiveness decision will come ‘before Aug. 31,’ Biden administration confirms: What you need to know​

Published Thu, Aug 11 202212:42 PM EDTUpdated 3 Hours Ago

Aug. 31 is an important date for millions of Americans with federal student loans — it’s not just the day the pause on payments is set to expire, but also the deadline by which President Joe Biden will decide on broader federal student loan forgiveness.
CNBC has reported that White House officials are zeroing in on canceling $10,000 for all borrowers who earn less than $150,000 per year, but the administration has yet to confirm such plans.
More than 40 million Americans carry student loan debt. A wide-scale student loan cancellation of $10,000 per borrower would forgive a total of $321 billion of federal student loans and eliminate the entire balance for about 11.8 million borrowers, according to the Federal Reserve. The average borrower would receive $8,478 in student loan forgiveness.

 

Loulit01

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phoenix2020

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Loan forgiveness = hand-out to the educational institutions and their high tuition bills. I do not support debt cancellation that doesn't also include a mechanism for schools to have some skin in the game. Looking at this issue, everybody but the schools come out on the losing end of this topic. Taxpayers? Writing checks. Students whose debt was forgiven? They missed out on an important life lesson. Students who paid off their debt? They're bitter. The schools? Oh, they get paid either way, and they are not incentivized in the slightest to contribute to a solution.

Indeed, if I'm a university, why not hike tuition even more? I mean, the taxpayer will pay for it!
 

dmpi

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The majority of these 'degrees' were for questionable cooking and medical billing school as advertised on late night TV. Most of the students never seriously intended to graduate but rather live off student loans for a few years and then walk away. I guess they got their wish thanks to Biden & the taxpayers.
 

MrWonka

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How do people worried about our financial future feel about all of that?
There is no benefit to the country to have millions of young people in their prime struggling paycheck to paycheck. These young people are already paying the overwhelming majority of Federal Income taxes.
We want these people to buy houses, have children, and save for retirement. While I would prefer some alternative solutions, there is no benefit to the country in holding back the very people who are driving our economy and being tasked with paying down our National debt.
 

jaypatriot

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Education Department cancels $3.9 billion in student debt for more than 200,000 borrowers—here’s who qualifies​


You're behind the times.
$3.9 billion is small potatoes compared to the possible $321 billion to be forgiven.
Does the fact that the contemplated forgiveness amount is 80 times larger than what you cited make any difference to you?
 

jaypatriot

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There is no benefit to the country to have millions of young people in their prime struggling paycheck to paycheck. These young people are already paying the overwhelming majority of Federal Income taxes.
We want these people to buy houses, have children, and save for retirement. While I would prefer some alternative solutions, there is no benefit to the country in holding back the very people who are driving our economy and being tasked with paying down our National debt.
Spoken like a true Liberal/Progressive/Democrat.
Damn the federal deficit. Full speed ahead!
Why not forgive car loans, mortgages, consumer credit loans, etc.?
Why stop at student loans?
 

jaypatriot

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"What is the rationale behind forgiving $250 billion in student debt?"

Shopping for votes.
Gee, now you're being cynical like me.
Anything to get those votes from young people who don't want to work hard to pay off their legal debts. Those are the kinds of voters the country needs - deadbeats and scofflaws.
 

Gimmesometruth

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"What is the rationale behind forgiving $250 billion in student debt?"

Shopping for votes.
Funny that, there are far more low income whites on welfare than low income blacks, yet low income whites vote far and a way .....wait for it.....GOP.
 

Gimmesometruth

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Pay 👏 your 👏 own 👏 damn 👏 bills. 👏
(WASHINGTON) — Students who used federal loans to attend ITT Technical Institute as far back as 2005 will automatically get that debt canceled after authorities found “widespread and pervasive misrepresentations” at the defunct for-profit college chain, the Biden administration announced Tuesday.

The action will cancel $3.9 billion in federal student debt for 208,000 borrowers, the Education Department said. The debt is being forgiven using a federal rule known as borrower defense, which is meant to protect students from colleges that make false advertising claims or otherwise commit fraud.

“The evidence shows that for years, ITT’s leaders intentionally misled students about the quality of their programs in order to profit off federal student loan programs, with no regard for the hardship this would cause,” Education Secretary Miguel Cardona said.
 

jaypatriot

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Loan forgiveness = hand-out to the educational institutions and their high tuition bills. I do not support debt cancellation that doesn't also include a mechanism for schools to have some skin in the game. Looking at this issue, everybody but the schools come out on the losing end of this topic. Taxpayers? Writing checks. Students whose debt was forgiven? They missed out on an important life lesson. Students who paid off their debt? They're bitter. The schools? Oh, they get paid either way, and they are not incentivized in the slightest to contribute to a solution.

Indeed, if I'm a university, why not hike tuition even more? I mean, the taxpayer will pay for it!
I cannot disagree with any of your points.
From personal experience, I know how easy it is for the debt to mount and you don't pay attention to it until you start getting notices from the government lenders.
I bit the bullet and paid it off because it was the smartest thing to do.
Kids borrowing money from the government simply believe a college education is going to help land a good job to where paying off the loan will not be a big deal.
Maybe some of them were smart enough to realize that if enough students complained about paying off their debts, the Democrats would think forgiving student debt is a good vote getter. Are some of the students that smart?
 

Gimmesometruth

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Funny how you inject race into the conversation (though not at all unexpected.)
Uh, the idea of "govt leader buying votes", via welfare, an argument you have made numerous times, inherently includes matters of race, my forgetful friend.

But of course, when your memes are skewered, you do tend to grasp on to anything to distract from your losing point.
 

NatMorton

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(WASHINGTON) — Students who used federal loans to attend ITT Technical Institute as far back as 2005 will automatically get that debt canceled after authorities found “widespread and pervasive misrepresentations” at the defunct for-profit college chain, the Biden administration announced Tuesday.

The action will cancel $3.9 billion in federal student debt for 208,000 borrowers, the Education Department said. The debt is being forgiven using a federal rule known as borrower defense, which is meant to protect students from colleges that make false advertising claims or otherwise commit fraud.

“The evidence shows that for years, ITT’s leaders intentionally misled students about the quality of their programs in order to profit off federal student loan programs, with no regard for the hardship this would cause,” Education Secretary Miguel Cardona said.
Pay 👏 your 👏 own 👏 damn 👏 bills. 👏
 

jaypatriot

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(WASHINGTON) — Students who used federal loans to attend ITT Technical Institute as far back as 2005 will automatically get that debt canceled after authorities found “widespread and pervasive misrepresentations” at the defunct for-profit college chain, the Biden administration announced Tuesday.

The action will cancel $3.9 billion in federal student debt for 208,000 borrowers, the Education Department said. The debt is being forgiven using a federal rule known as borrower defense, which is meant to protect students from colleges that make false advertising claims or otherwise commit fraud.

“The evidence shows that for years, ITT’s leaders intentionally misled students about the quality of their programs in order to profit off federal student loan programs, with no regard for the hardship this would cause,” Education Secretary Miguel Cardona said.
Your example amounts to 1/80th of the amount of debt cancellation contemplated.
How relevant is it to the overall debt of over $1 trillion in student debt.?
 
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