Did you read that Biden again plans to cancel student loans?

[msc545]

President Biden, in California on a three-day fundraising swing, announced that he is canceling federal student loans for nearly 153,000 borrowers during a stop in Culver City CA on Wednesday. The $1.2 billion relief package, he said, would allow them to think about buying a home or investing, instead of “working like a devil.”

[lightbulb27]

Id like to hear a reasonable justification… that isn't one.


Im thinking going back to school for counseling degree. Makes me think take anloan… heck id pay 20% rate… as long as biden promises to cancel it when due… its free money and i dont pay a dime. Basically… free college!


Is the govt being stupid or smart?

[Soteris]

Why would free collage not be a good thing? That said, Biden is not a king so this is not a blanket cancellation of student debt but rather a cancellation of some student debt (such as those who has paid the entire amount that they loaned and is just paying off the interest right now or those who have been paying back for many many years already if I remember correctly)

But yeah, free collage means that your population achieves a higher level of education and can work more technically demanding jobs which are more productive which in turn increases the GDP and the amount of money the government gets in taxes. There is a reason why higher education is free in many western countries and it is not because the government is being nice.

[BoopBoopBeep]

@Soteris It's not free. The professors and administrators are still getting paid. They're not just waiving a magic wand and dissolving how a capitalist economy works, their just raising taxes/the national debt to pay for it instead of the borrowers.

[msc545]

I'm not sure if that is incurred or if taxes are actually raised. Instead it's possible that funds are diverted from silly expenses and government programs and instead invested in education. I think the idea that a well-educated population is more productive and contributes more to our country is well taken. Many European countries have free college and they are not doing it as the previous poster stated because they are nice. They are doing it because in the long run it pays off.

[Soteris]

@BoopBoopBeep If I give you 5 dollars and then I get 10 dollars in return. Would you argue that I got free money? Even if you want to argue semantics (which this is) the government is still going cash positive because you can see this as an investment that gives higher returns. And the best part is? Unlike most other "capitalist economy" things no one loses any money here because the added value is mostly from new wealth creation rather than simply moving money from one group of people and giving it to another.

So yes, its "Free money". STFU.

[BoopBoopBeep]

@Soteris Your understanding of economics is troubling.

[Soteris]

@BoopBoopBeep So is yours. Again, the economic return from education is from new wealth creation. It does not have to cost anyone anything.

[BoopBoopBeep]

@Soteris So when I am a lender, and you borrow $10 for lunch, and that lunch debt is cancelled by MSC, so he gives me $10, do you feel that he did not ever work to create that $10 or he's just so rich that it doesn't matter because he can pull it out of his giant Scrooge McDuck pile of gold?

"Cancelling" the debt doesn't make it dissolve into the aether. It just changes who pays it from you, the rightful person who took out the loan, to the government, which is the only entity that doesn't' have to live within a budget. This is what's wrong with the left and the right. They don't understand that a budget is zero sum, so we get wild deficit spending on their own agenda's projects. That deficit spending has to be one day accounted for in higher taxes or inflationary printing of money.

[BoopBoopBeep]

And there's no economic return on someone's gender studies or cosmetology degree. You want to "cancel" careers we're short on that actually matter, that's a different conversation.

[lightbulb27]

Can discuss merits of free education in another thread, maybe. this is cancellation of debt by shifting to the govt balance sheet and dealt with via inflation. Right? I don't know the details but they keep cancelling billions and I would think it adds it to the national debt, which means 'we' pay it off plus interest instead of the original holder.
I suspect eventually, they repudiate the debt by inflation... as the plan.
The problem I have is the sum total of it all is impactful to everyone via debt, some hit harder than others in standard of living.
The other issue is bad precedent going forward. Why pay off student loans if anticipate them being written off? I worked hard and paid all my debt, others don't. some take education with low priority.

I will make you an offer. I want to go to school, cost at Yale is $120,000. I borrow that at 15% int from you, or Sweden (because you are 'nice'). In 3 years I will graduate top of class... but I won't pay it back, and Sweden can 'write it off'.
Deal?
That's the problem... When it's personal, it does not make any sense. It's a loss... someone is taking a loss.
The only justification I see, given I don't know the details, is US Govt bailed out a bunch of crooks, gives $ to corp america and endless wars, so this is handouts to some of the common people.

[Soteris]

As far as I understand it Biden has only been able to cancel federal loans because it is a unilateral decision from the president rather than passed through congress so that would fall on the tax payer. That said, its not like there is guaranteed liquidity in loans either so there is an open question of how much money the government would have been repaid regardless. The loans that has the highest priority of being forgiven are those that are the least likely to be repaid, generally speaking because they are struggling financially regardless.

Considering that the average person pays around 535 000 dollars in taxes over their lifetime and the average student debt is about 29 000 dollars I do not see it as particularly problematic. Furthermore, by giving people an education you obviously also increase their future income and how much money they will pay in taxes going forth.

As such the government is not really going to LOSE money by investing into people. Furthermore is the argument that the wealthy should pay a higher tax burden in the first place but ill put that conversation to the side.

I also do not buy the argument that "I did it the hard way so everyone else should too." We are supposed to build a better future, not keep everyone else down just because we did not get the same luxury. With this sort of mindset we would still be cavemen living the hard life to the fullest.

Also your example is literally how schools work around Europe. I, a Swedish person, can go to Germany and get a free education paid for by the German tax payer and then once I am done I can leave and go back to Sweden.

The reason Germany (and other countries) are so generous with their education is because even if only a few remain and become German tax payers they will still make up for everyone who does not. It is a program that has a higher return on investment than what it costs. USA is really behind the curve on this one.

[lightbulb27]

@Soteris were getting into "free education" which is another topic. I'm familiar with French free college and looks awsome to me. However, I know multiple french people that all want to leave and come to the USA after college. Why you ask? Because they realize when they get job they will be paying back the "system" for the rest of their lives and difficult to get ahead. So they are scheming to come to USA, where they are "free". maybe some don't think that way, these are the adveturesome ones.
Like I said, I can be convinced of free education except I think in general, it's a bad idea because I see too many people not value things when it's free. I don't like seeing people have fun on my dime when I sacraficed. That is simply theft via the government distribution system. Whether it provides benefit to society is secondary. If it does, then why not pay back the loan.
The other part of this is govt has made education expensive by way of their policies... and then they go and hand out money to some and waive the balance to others while charging the workers like my family, generally speaking... full price. we pay for it ourselves... hard to get govt grants and free money.
The problem with socialism is it can be de-motivating. It's a diff system.
My offer stands... I'll take a "loan/grant" from the great society including Sweden. I will go to school and then contribute back to society many fold, as you've said. Assuming I don't find too much fun or distractions and bomb out. but it's free money. I can send you bitcoin address to send me the $160k USD.
The problem is that $ has value... as does time. That seems to get lost in the issue... and maybe that's the core idea behind socialism and current policies in USA.

[Soteris]

The reason most developed countries do not expect students to repay their loans (aka free education) is because it is uneconomical. Fewer people will get a higher education which will slow down the development of the country and those who still get a higher education will be less productive because they are busy paying off a loan rather than get an early start in life putting them several years ahead of those in for example USA.

I also do not agree with people in France choosing to move to USA for supposed better opportunities. The social mobility in USA is not that good, being ranked 27th in the world as compared to France being ranked 12th. If you are already rich then I can understand going to USA since you can get preferential treatment and its easier for rich people to get richer over there but as someone without like 100 millions in my bank account that does not apply to me or you or your friends.

And as I said, education in Sweden is free. You can come over here anytime you want and get a higher education. We even have classes entirely in English to help foreigners who come over here to learn. I got no problem with you exploiting something which is freely given. In my eyes this is more a problem with the way you view the world than anything else.

[lightbulb27]

It may be, my mind is open to the concept. But i see what they are doing as a level of corrupt… which they do for corporations as well of course. Why should i pay for my kids college in cash after all those years of saving. Its messed up… those whom work hard, save, discipline… pay. If you fail, mess up… get free college or loans waived. Like rewarding bad behavior. That said… we do that with banks and such as well many times w bailouts. Is crony capitalism the root to socialism?

[lightbulb27]

I have to question as well.. whom is making these decisions and how? Is it fair? I've heard rumors some of it is medical personnel... whom should be able to pay their loans. All for not..."The earliest the rule could take effect is July 2025... with some time for public comment". so it isn't reality yet... it's proposal.

[Soteris]

Of course it is underhanded, it is politics after all. It does not necessarily mean it is bad though. Give a corrupt man the right incentives and they will be more principled than a fanatic. In a way the whole purpose of a Democracy is to give the politicians in charge (who are inevitably corrupt since power and money always does that) a motivation to be more principled though locking their powers behind winning votes.

But yeah, the decision to make higher education free is corrupt all the way though. From the politicians trying to appear "nice" to education mainly being for the benefit of corporations since it trains people to become better employees etc.. As I said before, countries do not do things to be "nice", they do it because it is beneficial. In the case of free education it just happens to benefit everyone involved in their own ways.

Students gets a valuable education for free, corporations gets higher qualified workers, the politicians gets good public image and the government gets a more developed and richer country to compete with the rest of the world.

As for this particular case, not entirely sure. I know this is mostly because Biden was blocked in the house from pushing through a more legitimate loan forgiveness bill. As a result he has instead used his powers as president to force through a more limited version of it without the approval of the house and senate. It is hardly a perfect bill because it can't be due to the limitations put on the president. After all, the president is not supposed to rule the nation directly like this.

Also you could just use that money for something else. Buy them a car for their 18th birthday or something and give them the personal freedom to drive at an early age with a nice car for example. Or perhaps help them buy an apartment or a house which would help them probably more than an education short term speaking.

[Fireguy17]

anything to get votes.
Howabout all of those other people that had student loans and worked like devil to fulfill their financial obligations. Are they going to get reimbursed for all of thier hard work?

[GoodGuyBreakingBad]

Yes, I read that online.

[exitseven]

yes, what the hell, buying votes for himself with taxpayer money. Who cares what the supreme court says.

[handsomelad70]

Amen to that, but these colleges should be held accountable (especially those with huge endowments) for extorting students and their parents.

[laly520]

devil talking about working like devil

interesting

[ProbablyClueless]

I did hear about that. It's certainly not the worst use of federal funds.

[JayBones]

Lol. I love it as a hard working g guy that never went to college. The degrees are now worthless.

[msc545]

Congratulations for not going to college. What the heck you only gave up about 1 million in lifetime income as a result of that bad decision.

[JayBones]

I'm a financial analyst that makes well over the national average. I own my home out right and have never had a debt balance.

[msc545]

How nice for you.

[JayBones]

Yeah. I think so. Retired 15 years earlier than so many smarter peers.

[noohair]

That function is not an executive function. It belongs to congress.

[KrakenAttackin]

This is a shameless play to win more female votes.

[KrakenAttackin]

Also, debt isn't cancelled, it's just transferred to the rest of us.

[Yabbut]

Hold your breath until it actually happens.

[Wiredone]

He should start canceling mortgage payments

[Anonymous]

It's a bribe. He needs more votes.