student debt forgiveness (1 Viewer)

The_Doc_Man

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In the short run, a lot of unscrupulous financial institutions that catered to questionable schools will end up being punished. Long term, kids will have a tougher time getting loans to any schools that lack good track records for graduation. Which means they might have to go to cheaper community colleges. Which really won't be bad for the small colleges of the USA.
 

conception_native_0123

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Why will kids have a tougher time getting in good schools long-term richard?
 

The_Doc_Man

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Like I said, short term, lenders will be punished. But that punishment will be highly visible to every lender. Lending institutions will have to raise their standards to avoid getting stuck in the future. Raised standards = fewer loans.

The GOOD news is that fewer fly-by-night schools will be around because lenders will know to do a little more verification of the credibility and/or accreditation of the schools in question.
 

Steve R.

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Like I said, short term, lenders will be punished. But that punishment will be highly visible to every lender. Lending institutions will have to raise their standards to avoid getting stuck in the future. Raised standards = fewer loans.

The GOOD news is that fewer fly-by-night schools will be around because lenders will know to do a little more verification of the credibility and/or accreditation of the schools in question.
To my knowledge these are government guaranteed student loans. As such, it is the taxpayer who will be held paying the "bill". A grave injustice. Under government guaranteed loan programs there is no incentive for the entity loaning the money or even the school to evaluate a student's credit score or to even evaluate if a prospective student would be able to graduate. Students are mere "revenue units". Government backed loans are a "green light" inviting fraud. They are an anathema.
 

The_Doc_Man

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Perhaps I misunderstood the nature of the forgiveness. If so, that makes it even worse. The pain MUST hit the lenders in order for a correction to occur in the egregious nature of those loans.
 

Pat Hartman

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Did this school defraud the students? Did they graduate? Did they get work in the industry? Why did this go on for SEVEN years??????

Why does the Congress not have to answer for their stupid bills? If you are going to guarantee student loans with MY MONEY (which they shouldn't be doing), can't they at least apply standards? Like the students have to be sufficiently physically fit to be able to stand on their feet for the better part of a work day? And that at least 90% of the graduates have to get a job in the industry within three months of graduation? And that the school doesn't get the full tuition amount if the student doesn't graduate. And their rating gets dinged if their graduates can't get jobs.

These for-profit technical schools should be easy to track. If they are not producing graduates that companies want to hire, they should not qualify for loan guarantees. When I was hiring programmers in the 80's and 90's, my preference was actually graduates of these technical schools. The students were a little older than the typical college graduate and had real world work experience and the gumption to go out to better themselves. I found them to be better programmers than the kids straight out of college who were much like politicians. They had no clue how a business worked or that the goal was to make the company profitable.

Has anyone bothered to track the increase in higher education tuition costs once the Congress started offering grants and loans or loan guarantees vs inflation?

My daughter and my granddaughter went to the same school. My daughter graduated in 1995, my granddaughter in 2021. Tuition was $1500 per semester. In 2021 tuition for my granddaughter was $12,000 per semester. Here an inflation chart for that period. So based on inflation during that 30 year period, tuition should be less than $3,000 per semester but it is $12,000!!!!!! We can thank Congress for that piece of inflation. They've done the same thing to medical insurance.

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Steve R.

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Why does the Congress not have to answer for their stupid bills? If you are going to guarantee student loans with MY MONEY (which they shouldn't be doing), can't they at least apply standards?
The simplest answer, that obviously overlooks many subtleties comes from Alexis de Tocqueville:
Moreover, since the politicians are spending "other peoples money", they don't have a vested interest in protecting it from fraud. It's all about the optics of the politicians demonstrating to the public how generous they are in helping the public achieve the American dream of a good education.
 

Pat Hartman

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I wonder if members of Congress have a calculator. Is my personal tax increase due to this new, stupid bill I'm about to vote for going to be overcome by my insider trading on it?
 

Steve R.

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I wonder if members of Congress have a calculator. Is my personal tax increase due to this new, stupid bill I'm about to vote for going to be overcome by my insider trading on it?
Your calculator uses the wrong numeric "base". The calculators used by the members of Congress use "base" voters. That "base" does not work with "base" 10 computations.
 

Pat Hartman

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College costs are up more than FOUR times the rate of inflation!!!!!!!!!!!!!!!!!!!!! Who caused that? Congress with their stupid "help". Somehow, they never include assessments of the effectiveness of their programs. They just spend my money like a drunken sailor. My apologies to my Navy friends who drink.
 

Jon

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It seems grossly unfair to me to just bail out those who haven't paid off their loans, while the diligent and thrifty get nothing. Postgrads who allocate money towards holidays, leisure or even investments end up better off than those who paid off their debts. What sort of message does that send? Why should you gift one group of students over another just because they decided to spend now and not save?
 

The_Doc_Man

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With college costs rising so badly, it makes me sad. I'm not sure if I could do today what I did over fifty years ago, even if I were a young man.

When I was going through both undergrad and grad school, I paid my own way by working as a musician. So besides playing ceremonial music for weddings, I worked nights in smokey, smelly, dark bars with customers who were drunks, flamboyant gays, and probably more than a few criminals (considering that our boss was very likely "connected" at the time). But I only had to borrow $40 dollars from Mom ONCE because of a lab fee I hadn't expected. I paid her back within a month. So when I graduated with a Ph.D. I had NO debt and had a job that started before the university's commencement ceremony date. I was broke, but the job took care of that soon enough. Now, I doubt I would be able to earn the amount of tuition and activity-fee money required, even for my commuter-college school as opposed to a big-name school.
 

Pat Hartman

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Why should you gift one group of students over another just because they decided to spend now and not save?
It is actually the standard Democrat policy. Punish the frugal with inflation and reward the irresponsible. No one with any understanding of economics would vote for a Democrat but they can buy votes from the ignorant by giving them "free" stuff. But those feckless Republicans in Congress have to stop supporting the outrageous Democrat spending bills. I was really bummed the second time Trump backed down to Pelosi and didn't let the government shut down and stay shut down. I think the first spending cut when there is no approved budget should be the Legislative stipend that is used to run the offices of members of Congress. The second item should be Congressional salaries since that is the only responsibility laid out in the Constitution for the House.
 

Isaac

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In the short run, a lot of unscrupulous financial institutions that catered to questionable schools will end up being punished. Long term, kids will have a tougher time getting loans to any schools that lack good track records for graduation. Which means they might have to go to cheaper community colleges. Which really won't be bad for the small colleges of the USA.
The tiny percentage of the problem that is represented by truly unscrupulous schools promising things that were untrue has already been solved by targeted debt forgiveness. And I don't think that has hardly anything to do with the main problem or "problem" that they are trying to solve.

The main thing is just people who decided they must go to a $100,000 college and were stupid enough to actually do that and take on $100,000 in debt in exchange for nothing but an average four-year degree. Anyone who is that dumb, I don't think they are probably a very good fit for college in the first place.

The whole student debt forgiveness debate is ridiculous. We all make bad financial decisions sometimes. That doesn't mean your debt should be forgiven. It would be extremely unfair to those who pay the price for doing dumb things if every once in awhile a few of them have total forgiveness.

In addition to that (which is good enough in my opinion), then you have the whole question of why the person was dumb enough to pay FULL RETAIL PRICE for college in the first place! That would be like claiming I need transportation therefore I must have a maserati. And poor me, and pity me for having to pay for one. But that's also ridiculous, given that community colleges are so dirt cheap they're almost free nowadays, and that's half your college right there. Many of them are partnering to actually offer four-year degrees and that's been happening for several years now.
Then you finally transfer to a state school for your last one to two years max, during which you go part-time in the evenings and work full time. Anyone with half their wits and a limited budget would do what I have just described.

Now for the last point. Not only everything that I've said up till now, but we haven't even talked about scholarships yet. If you're a halfway decent high school student and test taker for college entrance exams, at least 20 to 30% of the little bit that's left should be being paid for by scholarships and grants.

What are we down to now, 5 to 10,000 Max to finish a college degree?

Keep all this in mind when the person who thought that they were smart enough to go to Harvard is bitching about having $150,000 in loans....
 

Steve R.

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There was a prior thread concerning this. This is a never ending policy nightmare. If you assume the debt, you should be responsible for paying it off. As many people have expressed, why should a person who never went to college and who may have a low paying wage payoff the debt of a person who went to college and who consequently earns a lot of money. One example of such a high income abuser would be Alexandria Ocasio-Cortez.
 
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Jon

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As many people have expressed, why should a person who never went to college and who may have a low paying wage payoff the debt of a person who went to college and who consequently earns a lot of money.
I like the way you put that. A very good illustration of how ludicrous the policy is.
 

Steve R.

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An interesting take on student debt and so-called racial justice.
Well BLM has received a lot of "protection" money from various virtue signalling corporate enterprises. In the name of promoting so-called racial justice, BLM could use some of their extortion $$$$$$ to pay-off the student debt of deserving students. Alas, as usual, the left will never use their money to support their programs, but demand that the $$$$ be provided by the government (actually the taxpayers).
 

Steve R.

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Students who have paid off their school loans will not be eligible

It is unfortunate that the students hurt by Corinthian Colleges were financially hurt by the scandal. Bailing them out, unfortunately presents a great deal of "moral hazard". People who have been financially responsible are themselves being "hurt". Furthermore, why should the taxpayers be "forced' to make those who made a bad financial decision "whole"?

Two quick points.
  • When the government creates these types of programs to "help" people this creates massive opportunities for fraud.
  • Those who should have liability in evaluating the credit worthiness of students and/or their ability to complete college have NO liability. That means each student is reduced to being simply a "revenue unit". Both the lending institutions and the colleges are compelled to attract and sign-up as many "revenue units" as they can. It's free money. 💲 💸 💲 💸 🎉🎉🎉🎉🎉🎉
 

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