Should College Loans Be Forgiven?

[Streetbull]

Yeah, the people who paid or are paying their loans would be pissed: "If I had to pay, why don't they???". That's understood.

On the other side of this is the crushing burden on young college grads. Here are a few:

#1 According to the Wall Street Journal, the class of 2014 is �the most indebted ever��

#4 At this point, student loan debt has hit a grand total of 1.2 trillion dollars in the United States. That number has grown by about 84 percent just since 2008.

#8 In 2008, approximately 29 million Americans were paying off student loan debts. Today, that number has ballooned to 40 million.

#9 Since 2005, student loan debt burdens have absolutely exploded while salaries for young college graduates have actually declined�

"The problem developing is that earnings and debt aren�t moving in the same direction. From 2005 to 2012, average student loan debt has jumped 35%, adjusting for inflation, while the median salary has actually dropped by 2.2%."

It should come as no surprise that the delinquency rate on student loan debt in this country is far higher than the delinquency rate on mortgages, auto loans and credit card debt.

This is a financial bubble that gets worse with each passing year, and if we continue on our current course it is going to end very, very badly."

http://www.zerohedge.com/news/2014-1...an-forgiveness

This is similar to the ethical dilemma about feeding poor people: sure, people should work and support themselves but do we really want millions of starving desperate people robbing and looting for a meal?

Do we want millions of people to be desperate, making a choice between food and student loan repayments?

Discuss?

[ScubaStevo]

Should those who paid for college get a refund?

[ScubaStevo]

Difference between food stamps and college loan forgiveness:

You don't have to go to college to survive.

[CLEAN_SET_OF_10]

People must be punished commensurate to the bad decisions they make.

This is a cornerstone of a capitalist society.

This is no different than taking a loan to fund a risky investment, or taking a loan and going to Vegas and gambling it all away.

Should people who took a loan and lost it on an investment be forgiven? Why does this apply to education and nothing else?

I want to open my own business. I want a loan and if my business fails, then I don't have to pay the loan back.

Same thing, no?

On top of that, student loans tend to be more lenient, lower interest and have more forgiving terms than a cash loan for any other type of investment.

I don't want student loans to be forgiven. I want to see people who misplayed their cards learn a very hard lesson, and come to the realization that they only have themselves to blame.

[RedPolo]

Nope, it's not my fault they chose a chitty major.

[kusok]

I bet that according to strangely and suddenly devolved zen bowman and posthardcore's "before" picture av ugliness libertarians must be made at gunpoint to pay for other peoples' education.

[nutsy54]

Loan "forgiveness" is just a twisted way of saying "theft". Where does the money come from to pay back what was loaned, if not from the person who borrowed it?

[woofermazing]

Doesn't actually fix the problem, it's just a feel good position. Colleges will still keep raising prices to exploit larger and larger government loans. Might make things worse because the next couple generations will also expect loan forgiveness, so taxpayers will just be perpetually footing the bill.

Allow student loans to be discharged through bankruptcy, and things will correct themselves very quickly.

[kusok]

Loan "forgiveness" is just a twisted way of saying "theft". Where does the money come from to pay back what was loaned, if not from the person who borrowed it?

Agreed. I wonder also where money comes from for bombing middle east, Obamas jumbo jet, and your salary.

[nutsy54]

Agreed. I wonder also where money comes from for bombing middle east, Obamas jumbo jet, and your salary.

Or potatoes. We can't forget the cost of potatoes when posting a random list of unrelated items in a thread about student loans

Then again, Article I, Section 8 of the Constitution provides for a military
Article II provides for a President

While nowhere in the Constitution does it mention a Federal authority for personal banking services to provide student loans...

[CLEAN_SET_OF_10]

I know people who advocate a system in which those who cannot afford to pay for college in cash agree to permanent wage garnishment (to the tune of a few percent) off any paycheque they see in their lifetime, no matter if they are working as a fry chef or as a CEO after they graduate.

Not exactly sure what the potential pitfalls are (schools become underfunded?) but it's an interesting idea considering the current system appears not to be working.

[CalmWind]

No.

But what SHOULD happen, is that the government get out of handing out loans, period. Their stupid loan programs are allowing Universities to charge students through the nose. It's artificially raising the price of education.

If the gov't got out of this arena, then the Universities would have to drop their prices again, because people simply wouldn't be able to afford to go.

So then a college degree would become affordable again.

[nutsy54]

No.

But what SHOULD happen, is that the government get out of handing out loans, period. Their stupid loan programs are allowing Universities to charge students through the nose. It's artificially raising the price of education.

Bingo!

[brighamw]

Should those who paid for college get a refund?

And people doubt Scuba's enlightenment...

THIS is the only question pertaining to this discussion that really matters, IMO

[nutsy54]

Do we want millions of people to be desperate, making a choice between food and student loan repayments?

The real issue is why they CHOSE to incur debt they wouldn't be able to pay off. And why a ridiculous Federal Government program not only allowed, but encouraged it.

OMG! Everyone is driving around in Lamborghini's, and the debt is crushing them!
Derp, stop pushing people to buy Lamborghini's they can't afford - and stop demanding that someone else foot the bill for their bad decisions

[CalmWind]

Bingo!

Yep.

Oh, and furthermore, too many people are going to college, who shouldn't be.

[TimDF]

Never!

[tsbalr120]

Private loans? No. A company gave you their money with the expectation of being paid back.

Gov loans? If you wanted to go that route there should be a way more restrictions on who gets them. Only majors that are in need (no women's studies), gpa targets, drug tests, and only forgiven if you graduate.

[Cesarbruh]

responsibility and accountability, do you even?

[OutdoorX]

They have the income contingent plans where it caps at 10% of you income and your loan is forgiven after 20 years which helps a lot of people, but taxpayers will be on the hook for paying off the balances.

There is definitely going to be a student loan bubble and you have let it run its own course. It will teach a lesson to limit federal funding (they need to reduce and cap off student lending much lower than where it is today) and also teach a lesson to universities who have been racking up the cost of tuition despite technology making education cheaper to teach.

[jacklambert58]

If they file bankruptcy and the person has been out of school for 7+ years - it sounds reasonable to discharge student loans like any other debt. Bad loans are largely uncollectable anyhow, why not give people a chance to start fresh.

[RIKTER]

No.

But what SHOULD happen, is that the government get out of handing out loans, period. Their stupid loan programs are allowing Universities to charge students through the nose. It's artificially raising the price of education.

If the gov't got out of this arena, then the Universities would have to drop their prices again, because people simply wouldn't be able to afford to go.

So then a college degree would become affordable again.

You think this is by accident and wast known beforehand? Its a brilliant political strategy by winning on 2 fronts, first by making this albatross around the neck of young voters so crushing, that it gets them out to vote for leftist candidates that want to dismiss these loans and secondly, gets their parents to try and morally justify it to themselves to do the same, just for their kids loan though, because after their kids out of college they will vote for (R) candidates who are against it again........people like the OP, who vote conservative but has 2 kids in college so he's trying to rationalize this policy to himself, likewise I believe(could be wrong) he has a daughter who is a teacher and as a result favors unions because of it...

[FlaviusStilicho]

People must be punished commensurate to the bad decisions they make.

This is a cornerstone of a capitalist society.

This is no different than taking a loan to fund a risky investment, or taking a loan and going to Vegas and gambling it all away.

Should people who took a loan and lost it on an investment be forgiven? Why does this apply to education and nothing else?

I want to open my own business. I want a loan and if my business fails, then I don't have to pay the loan back.

Same thing, no?

On top of that, student loans tend to be more lenient, lower interest and have more forgiving terms than a cash loan for any other type of investment.

I don't want student loans to be forgiven. I want to see people who misplayed their cards learn a very hard lesson, and come to the realization that they only have themselves to blame.

Quoted for posterity.

Moral hazard is very real and costs each of us a ton of money.

And who thought unsecured loans to teenagers was a good idea?

[velvetmudhole]

Higher education is not a right. If you can't afford the school or to pay back a loan, then don't go. Also, it takes years to pay these off, I just don't understand how people think these are going to be gone in a couple years.

[TheAmericano]

Well there are ways to get you loan forgiven after 10 years

What should be done:
- Drop the interest rate

- Reward students for getting jobs within the 1st 6 months

- Only give Gov loans for majors that are in demand

- Audit schools, find out exactly how much is needed for paying for classes and nothing more

- Charge half for students that keep their GPA at 3.8+

[jacklambert58]

People must be punished commensurate to the bad decisions they make.

This is a cornerstone of a capitalist society.

This is no different than taking a loan to fund a risky investment, or taking a loan and going to Vegas and gambling it all away.

Should people who took a loan and lost it on an investment be forgiven? Why does this apply to education and nothing else?

I want to open my own business. I want a loan and if my business fails, then I don't have to pay the loan back.

Same thing, no?

On top of that, student loans tend to be more lenient, lower interest and have more forgiving terms than a cash loan for any other type of investment.

I don't want student loans to be forgiven. I want to see people who misplayed their cards learn a very hard lesson, and come to the realization that they only have themselves to blame.

Are you aware that each business loan you reference is in fact currently dischargeable with a bankruptcy? Nothing you said makes any sense, it solely makes you feel better about yourself aka female logic.

[nutsy54]

Are you aware that each business loan you reference is in fact currently dischargeable with a bankruptcy? Nothing you said makes any sense, it solely makes you feel better about yourself aka female logic.

There's a huge difference between destroying your entire financial life via bankruptcy, and having a single loan "forgiven".

[USAPump]

Loan "forgiveness" is just a twisted way of saying "theft". Where does the money come from to pay back what was loaned, if not from the person who borrowed it?

It comes from free money just like Obamacare

[jacklambert58]

There's a huge difference between destroying your entire financial life via bankruptcy, and having a single loan "forgiven".

ok, agree here, but I don't think anyone is seriously talking about just forgiving student loans out of the blue - more disinformation to gin up the base.

[nutsy54]

ok, agree here, but I don't think anyone is seriously talking about just forgiving student loans out of the blue - more disinformation to gin up the base.

Wut? It already exists if you choose the "right" job: http://studentaid.ed.gov/repay-loans...public-service
And Obama expanded other programs in June: http://www.whitehouse.gov/the-press-...ore-affordable
Additional legislation proposed this year: http://www.congress.gov/bill/113th-c...ouse-bill/1330