"How the college debt debate shifted with one big idea"

[Lyons212]

Before then. But which administration gutted the Consumer Finance Protection Bureau charged with protecting students from bad/predatory loans and loan managers? And who could hold companies like Navient accountable when they purposefully steered students eligible for the public service debt forgiveness program away from it?

This is not a right or left issue. The issue is the government basically took over the student loan business and also passed a law that prevented student loan debt from being dischargeable in bankruptcy. The schools don't care, non-profit/for-proft, public/private, they all see a treasure trove of willing and ease cash.

That is why the number of administrators at colleges have increased, the people who do not actually educate anyone. That is why colleges now have many fancy amenities and not the bare basics like dorms without air conditioning (hello Lyons Hall in the 80's).

That is why colleges are filled with students seeking degrees that will be very difficult to find a quality job with.

When student loan debt is not dischargeable in bankruptcy, the underwriting process that is used for most loan types is ignored...the result is you get kids borrowing 50 to 100K for degrees in things like psychology and fashion design. Good luck with that.

Colleges brag about the number of graduates who have either obtained fulltime employment or are in graduate school (with more student loans).

Make student loan debt dischargeable in bankruptcy and the problem is solved. People with large amounts of student loan debt could file for bankruptcy to get out from under the debt with all the consequences associated with bankruptcy. It will also prevent many frivolous student loans in the future. Of course colleges will no longer be able to count on that easy access to for naïve students which will result in many basically useless administrators losing their jobs...and bye-bye building more unnecessary buildings.

 

[Lionguy32]

It does when you borrow $100,000 to become a social worker.

Somehow I think the problem is bigger than a few debt-laden social workers.

 

[Ski]

NO. POLITICS. .

See the link below. From the article:

"(CNN) -- You have to hand it to Elizabeth Warren: The senator's slate of bold, transformational policy proposals has dominated the Democrats' conversation even if the presidential candidate herself has not dominated 2020 polls.

Her latest -- a proposal that according to her campaign's analysis would forgive $640 billion in student loans currently held by the government and make tuition largely free for public two- and four-year institutions -- would seek to address inequality, break down financial barriers to a college education and ease the debt burden on those who already went to school. The Massachusetts Democrat would finance it all with a tax on income over $50 million. That's also how she's pay for her universal pre-K proposal.

It would totally wipe away more than three-quarters of student loan balances in the country, according to an analysis by academics published on Warren's website.

There are other candidates for the Democratic nomination with plans to make college more affordable. Cory Booker would give every child a nest egg, funding those of lower-income children at a higher level, and Bernie Sanders has previously proposed a tuition subsidy program.

But Warren's proposal commanded new interest in the topic, although passing something of this magnitude in the Senate seems unlikely; Majority Leader Mitch McConnell, a Kentucky Republican, has vowed to be a "grim reaper" for progressive plans."

https://www.cnn.com/2019/04/24/politics/student-loan-crisis/index.html

Hopefully we can discuss this without making it about the LEFT. , the RIGHT. , or the WRONG. .

So, if I am someone that left high school and didn't take out college loans, I don't get a thing from this, but the person who took loans gets both the advantage of the degree and what amounts to a free wad of money in the debt they don't have to pay back? That is rewarding the irresponsible over the responsible. Thank god it is a pandering campaign promise with 0 chance of being enacted.

 

[indynittany]

Tuition at Penn State in 1988 was $3,000.

Which is double what I paid in 1977. $3,000 covered tuition, room and board when I was in school.

 

[Lion84]

Probably has a big impact on immigration too. If the US has more a more quality/qualified workforce, there is less need to supplement from foreign countries.

And even if ‘free’ not everyone would want or get a college degree.

Do you not think more people will come to the US for free education? I see this as a bigger draw for legal and illegal immigration.

 

[indynittany]

Somehow I think the problem is bigger than a few debt-laden social workers.

Of course it is. Just saying people need to deal with the consequences of their own mistakes.

 

[BobPSU92]

Possibly, because if they serve, they're unlikely to remain snowflakes for very long.

Or they’ll shit themselves, go AWOL, and run home to mommy.

 

[Lyons212]

That's great and something to be proud of. But to make an assumption that the entire student loan crisis is caused by a lazy generation of irresponsible people is completely inaccurate.

This generation is lazy. My daughter is graduating in a few weeks with a master degree in Occupational Therapy. In her class of 45 graduates, she is the only one who has obtained fulltime employment. Most of her class has not started looking for a job, many have said they are perfectly happy moving home to live with Mom and Dad and hopefully work PRN (as needed, on-call and part-time without benefits).

This is a profession with starting salaries in the 60ish K range, with many jobs available.

My daughter has student loans, she will be paying them off.

 

[BobPSU92]

How about NO EXCUSES?

Sure, but with some OUTRAGE. .

 

[Evan Ceg]

1. When people hear "college," they think of four-year baccalaureate degrees. The U.S. has no economic need for a greater percentage of American's to earn a BA/BS. Very few majors are currently in high demand, maybe some engineering and software occupations. The market demand exists mostly for sub-baccalaureate technical education.

2. I am skeptical about these so-called barriers to higher education. There are barriers, of course, to attending the school of your choice -- grades, costs, distance, etc. -- but show me a student with decent high school grades that can't get funding to attend at least a community college and begin the path to a higher ed degree if sought. If you are a minority student with good high school grades, the schools will find you.

3. "Free" college will only further exacerbate the proclivity of institutions of higher ed to expand administration. It's high time the burden for "making college affordable" falls not to the government but to the schools themselves.

 

[Lyons212]

Pandering to the millennials, Gen. X, Y, Z who are saddled with loans in an effort to secure their votes in the upcoming presidential primaries.

Exactly. Talk of free college, how exactly are you going to do that? How do you treat the fact that their are different price structures for public and private schools? Or going to a public school as an out of state student. Sometimes you don't have much of a choice based upon which schools offer what major.

 

[BudatPSU]

In my lifetime I earned 3 degrees, my wife earned 3 degrees, and my daughter earned 3 degrees. I paid for all mine by myself while I was working. My wife's parents paid for 2 of hers and we paid for the third. We paid for 2 of our daughter's degrees and a business she worked for saw enough value in her work to pay for her third degree, and required her to continue to work for the company for at least three years after she finished the Smeal MBA.

If it is of value to you and you want it, then you pay for it. It does not matter if it is a home, a car, a sandwich or an education.

 

[LemonEars]

If you can't pay off a car loan or a mortgage, your lenders will take your car or house from you. Kind of hard to do that with an education.

What about the young person who decides to borrow $100K for an around the world cruise for self enlightenment and when he/she gets home can't pay off the loan? How is that different from someone who spends 4 years partying while taking an Art History degree? Seems the same to me.

 

[Lyons212]

If you can't pay off a car loan or a mortgage, your lenders will take your car or house from you. Kind of hard to do that with an education.

Correct. However what they will do is ask you what you want to study, where you plan on attending college, how much you want to borrow and they will have a reasonable idea of your earning potential. Kids wanting to attend Drexel and borrowing $100K to study fashion design will get their loan application rejected. Kids wanting to major in engineering will most likely have their application approved. That would do away with much of the nonsense now.

 

[PS4814]

In my lifetime I earned 3 degrees, my wife earned 3 degrees, and my daughter earned 3 degrees. I paid for all mine by myself while I was working. My wife's parents paid for 2 of hers and we paid for the third. We paid for 2 of our daughter's degrees and a business she worked for saw enough value in her work to pay for her third degree, and required her to continue to work for the company for at least three years after she finished the Smeal MBA.

If it is of value to you and you want it, then you pay for it. It does not matter if it is a home, a car, a sandwich or an education.

So you attended college at a time when it was more affordable - and your wife was born into a family with the means to cover the cost of two of her degrees. This allowed your family to accumulate generational wealth that was then used to continue the cycle and give your daughter a head start.

Not saying anything is wrong with the idea of working for what you want - but to compare college tuition when you got your degrees to today is wholly ignorant of the issues at play.

Also, since your wife obviously wanted her first two degrees - but she didn't pay for them, doesn't that fly in the face of your argument of wanting and paying for something yourself? By your logic she should have said no to her parents help and earned her degree by pulling herself up by her bootstraps and working her way through college.

 

[anon_xdc8rmuek44eq]

Do you not think more people will come to the US for free education? I see this as a bigger draw for legal and illegal immigration.

No. A lot of companies depend on foreign workers who have the necessary education to work in-demand jobs (hi-tech sector). Think pharmacists in places no one wants to work (rural south). Give companies a bigger domestic talent pool, less need to recruit. Illegal immigrants aren’t taking those jobs - they’re already doing what most Americans don’t want to do.

 

[anon_xdc8rmuek44eq]

What about the young person who decides to borrow $100K for an around the world cruise for self enlightenment and when he/she gets home can't pay off the loan? How is that different from someone who spends 4 years partying while taking an Art History degree? Seems the same to me.

The value of an art history degree is the same as an around the world jaunt. Wow.

 

[screw44]

If the students dont pay their loans the gov might as well get out of the business of of lending. Let the colleges lend the money. How about the profs take a pay cut.

 

[Lionguy32]

Of course it is. Just saying people need to deal with the consequences of their own mistakes.

It's not a matter of mistakes. The problem with many of these student loans is that they have so many penalties you don't find with standard loans. The result is that if you fall behind at all, you wind up with a balance many times the original loan amount.

Total loan forgiveness is absurd, but there should be a way to work outstanding balances down to a reasonable interest rate.

 

[BobPSU92]

If the students dont pay their loans the gov might as well get out of the business of of lending. Let the colleges lend the money. How about the profs take a pay cut.

Cut the pay of the administrators first. barren makes a lot more than professors who actually provide value and draw recognition to the school through their teaching and research.

 

[Delco Lion]

So how big of a haircut is this going to be for taxpayers? Who pays for this? I'm not seeing real details on this.

 

[anon_xdc8rmuek44eq]

It's not a matter of mistakes. The problem with many of these student loans is that they have so many penalties you don't find with standard loans. The result is that if you fall behind at all, you wind up with a balance many times the original loan amount.

Total loan forgiveness is absurd, but there should be a way to work outstanding balances down to a reasonable interest rate.

They’re steered towards forbearance without realizing the financial risk/impact. Dig into Wilkes-Barre based Navient; they’re crooks.

https://podcasts.apple.com/us/podca...th-michael-lewis/id1455379351?i=1000434501803

 

[4rosco]

If the Federal government is paying the freight, the Federal will have considerable say in how these places are run.

Andrew Yang has an interesting proposal, though not necessarily related to Warren's . He point to the bloat in college administrations. Don't recall his base year, but mentioned that at one point, the ratio of students to administrators was 50:1. Currently it's 21:1. Yang proposes transitioning to 30:1. Colleges either sign on, or don't get Federal funding.

And when the Federal government starts requiring reporting from the institutions they will need more administrators to ensure they can meet those requirements.

 

[anon_xdc8rmuek44eq]

So how big of a haircut is this going to be for taxpayers? Who pays for this? I'm not seeing real details on this.

Young folks without tax loops to take advantage of.

 

[wbcincy]

So much ignorance in this thread. Every person over 40 thinks this is simply "I worked hard and paid for it myself, so should they!" But they ignorantly fail to accept that if they did exactly the same thing today as they did in their day, they'd be saddled with debt for 20 years, because it costs 10X as much. My wife worked full time as a manager at Starbucks while going to undergrad. 9 years later she still owes $40k. I got through undergrad without any debt, then went to law school, worked in public service for 6 years before going private, and owe $30k MORE today than I did when I graduated. I was making payments on those loans all that time, but they don't even keep up with the interest. Now that I'm private sector, I'm getting back ahead, but I'll end up paying over $300k for law school.

Now of course you can say I made that choice, and that's true. But the point is the system became broken because of stupid government decisions (longer discussion, but essentially unlimited money being given out without any regulation on schools meant they would all jack up tuition to pay for their arms races), so our generation was left with two choices: (1) do what you actually want with you life and incur unending debt, or (2) do some job you'll hate. Great choice. Really bold for all the folks here who want to say "go dig ditches" when they didn't get screwed by the stupid decisions of prior generations that led to the inflated tuition, so they could actually choose to do what they wanted with their life without it burdening them with an additional mortgage for 20 years.

 

[IANit]

Impossible.

Not the premise - just the idea of keeping left/right/wrong out of it!

Not sure how wiping away college debt takes care of inequality, it seems like vote pandering and a move toward socialism.

How would current 529 plans be addressed, etc?

Also - if everyone gets a college degree, then everyone has a college degree, and they become worthless.

According to the census 33 percent of the adult population (25 and older) has a bachelor's degree or higher. In the 1940s that number was 4.6 percent. Despite being a less exclusive club than it once was, earnings are still about twice as high for college grads vs. high school grads. I doubt that making college "free" would change those percentages a great deal. I don't believe there is a huge number of able people who are choosing not to go at all vs. taking on loans. The difference would be those who now must take out loans would be able to realize the full financial benefit of their degree upon graduation like their more well-heeled counterparts instead of having to wait 10 years or more. Quite often those are first generation college students or minorities (or both). Of course that will also mean that the "rich" family who previously paid for school no longer has to.

 

[Raffycorn]

So how big of a haircut is this going to be for taxpayers? Who pays for this? I'm not seeing real details on this.

By soaking the rich. Warren said when she announced the student loan proposal that she would pay for it through the multi-millionaire wealth tax that she proposed earlier this year.

 

[wbcincy]

Other than debt forgiveness, I would think we could at least form some sort of agreement across parties on a couple terms such as:

- eliminate interest on student loans (or at least reduce it to the cost of administering the debt). There's no reason for the government to be profiting on its population getting a higher education.

- Make all student loan payments tax deductible (or at least all interest tax deductible, currently there's a $2500 cap, and I'm paying over $6k in interest annually). It should be on top of the standard deduction as well.

People can dig in their heels all they want. This debt is going to cripple the economy in the future. Myself and millions of others are handing an additional $1k+ a month to the government instead of spending it on houses, furniture, electronics, dining, etc etc. That is only going to increase.

 

[Connorpozlee]

Of course it is. Just saying people need to deal with the consequences of their own mistakes.

The idea that somebody walking out the door with a social work degree should be paying the same amount for their education as somebody walking out the door with a business degree is silly to begin with. Tuition rates should be based on average future earnings with that degree.

 

[anon_xdc8rmuek44eq]

By soaking the rich. Warren said when she announced the student loan proposal that she would pay for it through the multi-millionaire wealth tax that she proposed earlier this year.

Right - so for everyone here making more than $50mm a year, thanks!

 

[delcoLion]

Thank god it is a pandering campaign promise with 0 chance of being enacted.

I wouldn’t want to bet the farm on that. This will happen, just a matter of time.

 

[wbcincy]

The idea that somebody walking out the door with a social work degree should be paying the same amount for their education as somebody walking out the door with a business degree is silly to begin with. Tuition rates should be based on average future earnings with that degree.

I am, generally, against government regulation. However, if the government is the one providing the funding, guaranteeing it, and/or not permitting it to be forgiven through bankruptcy, then it should be regulating the institutions accepting it.

If a school doesnt want to have its tuition regulated, then don't accept students using federal funding. That's their choice. But if they do, then the government should regulate the tuitions it is paying for.

 

[indynittany]

It's not a matter of mistakes. The problem with many of these student loans is that they have so many penalties you don't find with standard loans. The result is that if you fall behind at all, you wind up with a balance many times the original loan amount.

Total loan forgiveness is absurd, but there should be a way to work outstanding balances down to a reasonable interest rate.

Would you borrow and repay a loan of $50,000 for a car worth $10,000? In relative terms, what's the difference? You have kids borrowing six figures to get a degree which will never afford them the means with which to retire that debt.

We need to get back to some basics:

1) Stop allowing the men behind the curtain to determine the cost of capital. Interest rates are a function of supply and demand. They should not be manipulated by man.

2) Tuition inflation and this student loan debt bubble are the result of the easy money made available to borrow by government intervention in the free market. Markets need to be left alone.

2) Inequality is a fact of life. It exists everywhere. There's nothing wrong with that. If everyone and everything were equal, every game would end in a tie.

 

[Raffycorn]

I wouldn’t want to bet the farm on that. This will happen, just a matter of time.

I agree. It’s a concept that’s immensely popular with an ever-growing sector of the electorate. It’s pandering to that sector for their votes, sure, but in the real world we refer to “I know you want this, so if you vote for me I’ll work to make it happen” as electoral politics.

 

[indynittany]

I agree. It’s a concept that’s immensely popular with an ever-growing sector of the electorate. It’s pandering to that sector for their votes, sure, but in the real world we refer to “I know you want this, so if you vote for me I’ll work to make it happen” as electoral politics.

Which is akin to paying a burglar to steal from your next door neighbor.

 

[PS4814]

Here's an idea I heard a few years back that would never happen but is a fun one to think about imo.

Free tuition for you to attend college - but the college gets 1% (or some percentage) of your paycheck for the rest of your life.

It gives everyone some skin in the game and gets the government out of the loan business entirely. Colleges would potentially be more selective on who they admit, and also what programs they offer. You want 1% of a bunch of social workers' salaries, or 1% of petroleum engineers' salaries?

 

[LemonEars]

The value of an art history degree is the same as an around the world jaunt. Wow.

Actually the Art History degree is probably worth less than an around the world trip. At least the trip would provide some appreciation for other cultures. Also, the trip would only take a few months as opposed to 4 years.

My daughter graduated with high honors with a degree in psychology. It has been totally 100% useless to her. She lost 4 years of potential job earnings with no benefit whatsoever from the degree.

 

[wbcincy]

Which is akin to paying a burglar to steal from your next door neighbor.

Eh, it was the generation before us that made the stupid decisions that caused the absurd costs of tuition to occur. I won't feel awful if they're who pay for making those mistakes.

 

[Nitwit97]

So how big of a haircut is this going to be for taxpayers? Who pays for this? I'm not seeing real details on this.

Someone told us details and facts do not matter as long as your moral compass is correct.

I just don’t get these ideas where it is blatantly obvious that the person proposing them is not looking more than one step down the road.

 

[anon_xdc8rmuek44eq]

Actually the Art History degree is probably worth less than an around the world trip. At least the trip would provide some appreciation for other cultures. Also, the trip would only take a few months as opposed to 4 years.

My daughter graduated with high honors with a degree in psychology. It has been totally 100% useless to her. She lost 4 years of potential job earnings with no benefit whatsoever from the degree.

So, let’s all be engineers. That will be like interacting with 90% of this board all the time in real life. Fun.