Celebrating 10 years! 2007-2017

What if all student debt was cancelled? What if all student loan debt was cancelled?

Economic models show a boost to GDP and home ownership. " trijocker02/16/18
If all student debt was cancelled, I would spend all my mone boredgirl102/21/18
Don't get me wrong, I'd love to see this happen. I'd much ra thirdtierlaw02/16/18
How about they stop charging stupid interest first? Most triplesix02/16/18
This. I don't want a handout, just lower the interest to som loblawyer02/16/18
Scrap all interest, origination fees and penalties. That alo triplesix02/16/18
The same is true if we forgive all federally backed mortgage khazaddum02/16/18
My mortgage isn't forgiven, but I was given a grant for my d fettywap02/16/18
Too complicated. Just drop cash from helicopters. jeffm02/16/18
No matter how good it would be for the economy, a jubilee wo onehell02/16/18
You must have missed 2008. lilgub02/21/18
People used to put their loans into bankruptcy all the time fettywap02/16/18
Right, and they suffered the consequences of bankruptcy in t onehell02/16/18
How is that different from defaults nowadays. If student de lilgub02/21/18
I am a student loan debtor, but I still believe it's unfair guyingorillasuit02/16/18
My "real" suggestion has always been to lower interest rates thirdtierlaw02/16/18
I had loans from the private period and the interest was pri downwardslope02/17/18
You may have, but I used to get clients coming in with priva fettywap02/17/18
I handle private loans for creditor’s in bankruptcy. 10.75 khazaddum02/17/18
I agree with the above re: interest rates. I have no pro dietcoke02/16/18
Those interest payments is what made the programs profitable triplesix02/16/18
If my wife and I's debt was forgiven, I'd be saving much mor jd4hire02/16/18
I don’t disagree with the proposed economic outcome, but s qdllc02/17/18
I’m beginning to think that one of the primary macro benef onehell02/19/18
A “benefit” that comes at the cost of crushing debt on t qdllc02/22/18
The benefit is for the state and corporatists obviously. Rea triplesix02/22/18
Emerging trade schools only take F1 visa holders. Chain m aknas02/19/18
This is no different than giving out free money. Why would beaubaez02/22/18
LOL. Yeah. Because a part-time job is going to pay for $1,50 fettywap02/22/18
ABA limits part time employment to 15 hours a week. please lilgub02/22/18

trijocker (Feb 16, 2018 - 9:30 am)

Economic models show a boost to GDP and home ownership.

"The researchers looked at what would happen if the government canceled all federal loans (the majority of student debt) and paid off all privately owned loans -— as a one-time policy.Their economic models show that canceling student debt would lead to a boost in GDP by an average of $86 billion to $108 billion annually over the next 10 years. They also show that it would reduce the unemployment rate by about 0.3%."

http://money.cnn.com/2018/02/15/pf/college/canceling-student-debt/index.html

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boredgirl1 (Feb 21, 2018 - 2:02 pm)

If all student debt was cancelled, I would spend all my money on clothes and a new car.

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thirdtierlaw (Feb 16, 2018 - 10:08 am)

Don't get me wrong, I'd love to see this happen. I'd much rather have people in their 20s and 30s spending their money on goods, homes, etc. than paying off student loans. That is the age group that would actually spend their money opposed to just hoarding it. It'll also allow those students to become more competitive against immigrants without student debt. They'd be able to take a job for a lower salary and still have the same quality of life. So both employers and employees would benefit.

But it'll never happen unless there is a major market crash bordering on a recession. It'll also need to happen when boomers are trying their best to downsize their homes and they realize that only a few of the next generation has enough saved up for a downpayment on their homes or their debt to income ratio is too far out of whack to get a mortgage.

The reality is that there are people who are extremely bitter about people having student loans at all. You also get the group which paid off their loans and think that there is something fundamentally unfair that someone else gets a benefit that they didn't. Long story short, it'll never happen without some other catastrophic impetus.

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triplesix (Feb 16, 2018 - 10:19 am)

How about they stop charging stupid interest first?

Most people ain't down with forgiveness and why should broke and stupid subsidize lifestyles of middle class and upperiddle class who hates them?

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loblawyer (Feb 16, 2018 - 11:24 am)

This. I don't want a handout, just lower the interest to something reasonable for no risk, federally backed loans. Although I wouldn't mind the uncapitalized interest going away - it's a paper money barrier deterring me from throwing more money towards my loans.

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triplesix (Feb 16, 2018 - 11:35 am)

Scrap all interest, origination fees and penalties. That alone would let most people pay off their loans.

I don't fault people for not paying... If you are just throwing money on it and it still goes up, what's the point of paying?

The system. Is designed to extract every penny from those able to pay for profit while keeping those unable to pay as debt slaves for most of their productive lives.

Then they wonder why you people ain't buying houses or having kids haha

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khazaddum (Feb 16, 2018 - 10:35 am)

The same is true if we forgive all federally backed mortgages. People would put that money into consumption and boost local economies. It just isn’t going to happen carte blanche.

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fettywap (Feb 16, 2018 - 12:52 pm)

My mortgage isn't forgiven, but I was given a grant for my down payment.

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jeffm (Feb 16, 2018 - 11:38 am)

Too complicated. Just drop cash from helicopters.

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onehell (Feb 16, 2018 - 11:46 am)

No matter how good it would be for the economy, a jubilee would never fly politically because it just isn't fair to people who have paid their loans off, or who have already spent years sacrificing to pay them down significantly, or whose parents took out HELOCs or whatever to get a lower rate than what the feds were offering. It's a windfall for those on default or IBR, and the greater the balance the greater the windfall. It basically rewards failure and punishes success, which is the exact opposite of people's perception of how capitalism is supposed to work.

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lilgub (Feb 21, 2018 - 7:43 pm)

You must have missed 2008.

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fettywap (Feb 16, 2018 - 12:53 pm)

People used to put their loans into bankruptcy all the time back when you could. Nobody cared.

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onehell (Feb 16, 2018 - 1:57 pm)

Right, and they suffered the consequences of bankruptcy in the form of bad credit, losing all non-exempt assets, or living under a 13 plan for however many years.

I'm all for easing the requirements to get a discharge. Bankruptcy has always been pretty good at ensuring that the consequences are serious enough that people don't declare it lightly. But an unconditional write-off of all student loans is a whole different thing.

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lilgub (Feb 21, 2018 - 7:44 pm)

How is that different from defaults nowadays. If student debtors were treated like normal credit, they would already have all those issues.

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guyingorillasuit (Feb 16, 2018 - 1:00 pm)

I am a student loan debtor, but I still believe it's unfair to simply forgive student loans. I support forgiving interest on federal loans, or reducing it to 1 or 2%.

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thirdtierlaw (Feb 16, 2018 - 1:25 pm)

My "real" suggestion has always been to lower interest rates to a level that keeps in on par with inflation. From day one the government tells students to go to college. High School rankings are partly determined on the percentage of students who attend a 4-year degree program after graduation and the guidance counselors only real job is to get you into the best college that they can. You hear about politicians talking about making college more accessible to minority communities and then add in the boomers who believe that the only way to make it in the world is through college. But then the Feds use all that to make a profit on student loans. I think the Feds should put their money where their mouth is.

It's amazing how quickly people's loans would be paid back if they were only dealing with a 1 or 2% interest rate. But when people are taking out $100,000 at 6.8% it doesn't make sense for them not to jump on IBR. I know that is how I made my decision, I'd have my loans over halfway paid off by now had I only been paying 1-2% in interest. But due to the high-interest rate, some basic math told me that it was better to go on IBR and get my payment as low as possible and save that extra money in a conservative investment account to prepare for the tax bomb.

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downwardslope (Feb 17, 2018 - 9:21 am)

I had loans from the private period and the interest was prime + 1%. I think they have gone up a bit now but are still under 3%. It is quite manageable, as they were under 2% for a long time.

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fettywap (Feb 17, 2018 - 10:48 am)

You may have, but I used to get clients coming in with private loans above 10% interest.

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khazaddum (Feb 17, 2018 - 10:51 am)

I handle private loans for creditor’s in bankruptcy. 10.75-12% isn’t uncommon for undergraduate studies with a co-signer that has less than perfect credit.

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dietcoke (Feb 16, 2018 - 1:36 pm)

I agree with the above re: interest rates.

I have no problem paying back principal, and no problem paying back principal with inflation accounted for.

But my 7.2% loan? That's just absurd. It's so much more painful paying the govt a $500+/mo tax for buying into the education meme they sold me every day of my childhood.

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triplesix (Feb 16, 2018 - 2:05 pm)

Those interest payments is what made the programs profitable up until now. The program will be net negative within a year or two hence the calls for reform.

They got solid 10 years of exploiting idiots like us. Now that arrangement stopped working it is time to make some adjustments to get another decade in. Boomers really know how to exploit idiots.

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jd4hire (Feb 16, 2018 - 1:51 pm)

If my wife and I's debt was forgiven, I'd be saving much more cash, making max retirement contributions, and eating out/ drinking more.

We pay nearly the equivalent of our mortgage to the gov. It used to be more, but we refinanced to a 15-year mortgage.

I'd also try and save that cash to become a slumlord.

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qdllc (Feb 17, 2018 - 8:46 am)

I don’t disagree with the proposed economic outcome, but such a move (like immigration reform) has to address what caused the debt bubble in the first place or you wind up in the same place 20 years from now.

That means whole financial industries either shut down or scale back drastically as you have to put an end to student loans (or at least severely restrict them), lots of schools WILL shut down and emerging trade schools likely won’t absorb all of the displaced workers, and while I’m sure we’d survive it, I don’t know if it would massively benefit the economy. At best, it will reign in an out of control problem with the economy.

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onehell (Feb 19, 2018 - 11:50 am)

I’m beginning to think that one of the primary macro benefits of higher ed is that it sorta staggers entry into the workforce, and gives people who have fallen out of it something to do while they wait for the economy to improve or whatever. If everyone had to just find something to do starting at 18, or if people who got laid off didn’t have retooling/hiding out in grad school as an option, no way the economy could absorb that.

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qdllc (Feb 22, 2018 - 7:36 am)

A “benefit” that comes at the cost of crushing debt on the student.

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triplesix (Feb 22, 2018 - 10:13 am)

The benefit is for the state and corporatists obviously. Read between the lines dear. Onehell is always shilling for one or both while coaching in it language like he cares about policy and proles.

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aknas (Feb 19, 2018 - 12:06 pm)

Emerging trade schools only take F1 visa holders.

Chain migration and F visas takes American jobs, kill off their American co-workers, and force other Americans to stay in school and take on more debt for that elusive Big Law career.

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beaubaez (Feb 22, 2018 - 10:16 am)

This is no different than giving out free money. Why would we want to give free money to those who went to school and borrowed money? Seems unfair to those that worked summers and took part time jobs to avoid debt. And what about those that didn't go? Why should they not get something as well. Look at how socialism is working in Venezuela and Cuba.

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fettywap (Feb 22, 2018 - 10:18 am)

LOL. Yeah. Because a part-time job is going to pay for $1,500 an hour law school.

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lilgub (Feb 22, 2018 - 10:58 am)

ABA limits part time employment to 15 hours a week. please advise.

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