Student loan cancellation
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The “This you?” meme in Twittersphere:
https://www.theguardian.com/media/2022/aug/25/this-you-meme-biden-student-loan-forgiveness-twitter
Basically it goes like this:
- A critic (usually a politician) of student loan forgiveness tweets something about why loan forgiveness is bad (e.g., it may encourage more irresponsible borrowings, it is unfair to get the tax payers to foot the bills, etc.)
- Then some other Twitterite would respond with a screenshot/news clipping of said critic having taking advantage of loan forgiveness in the past asking “This you?” (E.g., the critic has previously taken a PPP loan or a farm-related loan that has since been forgiven.)
@Axtremus said in Student loan cancellation:
The “This you?” meme in Twittersphere:
https://www.theguardian.com/media/2022/aug/25/this-you-meme-biden-student-loan-forgiveness-twitter
Basically it goes like this:
- A critic (usually a politician) of student loan forgiveness tweets something about why loan forgiveness is bad (e.g., it may encourage more irresponsible borrowings, it is unfair to get the tax payers to foot the bills, etc.)
- Then some other Twitterite would respond with a screenshot/news clipping of said critic having taking advantage of loan forgiveness in the past asking “This you?” (E.g., the critic has previously taken a PPP loan or a farm-related loan that has since been forgiven.)
Yep, and it’s an idiotic attempt at an attack, anyway.
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The loan forgiveness of the PPP loans were a feature of the program. The forgiveness was an agreed to condition. Forgiveness was never a feature of the Federal Student Loans. There are no conditions required of the student except pay back the money at the agreed upon schedule., no forgiveness…There is no equivalence.
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Even if there was equivalence, people are still entitled to criticize programs that they are receiving benefits from. I still criticize the stimulus payments. I didn’t send them back though. Whether we kept the payments or not, I am still going to pay for them, as will Luke and Finley, so those were donated to a few worthy causes and invested into college funds. I feel no ethical dilemma over it. The payments were wrong, and we are seeing some of the repercussions of them now, but there is no moral high ground to turning away the payments so they can be squandered some other way…
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22 Republican Governors publish joint open letter opposing student loan forgiveness:
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I cannot help but compare the real benefits if we used that money to fix our immigration system.
@Mik said in Student loan cancellation:
I cannot help but compare the real benefits if we used that money to fix our immigration system.
Can we really use that “money” for anything else? There is no “new money” minted in this “forgiveness” business. The “money” has been paid out long ago as “loans.” Even without forgiveness, the repayment will be at best partial and will be spread over multiple years (perhaps well more than a decade), and whatever money used to repay the loans would just come from other parts of the overall economy anyway.
But if the comparison is for future appropriations of new funds between “helping students in America” and “fixing our immigration system,” that would be a different argument worth having.
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@Mik said in Student loan cancellation:
I cannot help but compare the real benefits if we used that money to fix our immigration system.
Can we really use that “money” for anything else? There is no “new money” minted in this “forgiveness” business. The “money” has been paid out long ago as “loans.” Even without forgiveness, the repayment will be at best partial and will be spread over multiple years (perhaps well more than a decade), and whatever money used to repay the loans would just come from other parts of the overall economy anyway.
But if the comparison is for future appropriations of new funds between “helping students in America” and “fixing our immigration system,” that would be a different argument worth having.
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It'll cost $400 billion.
The CBO:
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Dear Members of Congress:
This letter responds to some questions you asked about the effects of President Biden’s August 24, 2022, announcement on executive actions affecting student loans.
• The cost of outstanding student loans will increase by $20 billion because an action suspended payments, interest accrual, and involuntary collections from September 2022 to December 2022, the Congressional Budget Office estimates. That present-value cost is relative to the amounts in CBO’s May 2022 baseline projections.
• After accounting for those suspensions, CBO estimates that the cost of student loans will increase by about an additional $400 billion in present value as a result of the action canceling up to $10,000 of debt issued on or before June 30, 2022, for borrowers with income below specified limits and an additional $10,000 for such borrowers who also received at least one Pell grant.
CBO continues to analyze the executive actions and will publish additional estimates as soon as they are completed. The estimates presented here do not include any effects of the actions affecting income-driven repayment plans, any other changes in loan terms, or effects on loans issued after June 30, 2022. The present values of expected reductions of cash inflows to the Treasury are calculated by discounting those flows as specified by the Federal Credit Reform Act (FCRA). They rely on information available as of today about the executive actions, though more may become available when the application for canceling debt is published.
The cost of debt cancellation is the present value of the borrowers’ projected repayments of student debt before accounting for the cancellation minus the present value of repayments after doing so. As specified by FCRA, the costs of payment suspension and of debt cancellation will be recorded by the Office of Management and Budget in the federal budget as an increase in the deficit during the fiscal year in which the terms of the loans are modified. CBO will report those amounts in its Monthly Budget Review after they are recorded.
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Very interesting law suit. Remember the main problem isn’t the legal case against what the Feds are doing, it’s been finding some person or entity harmed by it such that he or it has standing.
This guy was already going to get relief under a current program but one that is explicitly exempt from state tax. So the Biden plan makes him worse off.
According to Garrison, he is already receiving debt relief under Public Service Loan Forgiveness (PSLF), a federal program for borrowers who work in public service at nonprofit organizations. Qualifying borrowers who make a certain number of payments and meet maximum income requirements can have the rest of their debts forgiven by PSLF. Garrison expects to qualify in about four years.
Importantly, debt relief under PSLF is not subject to state taxes. Biden's broad forgiveness plan, however, will be taxed as income in Indiana—where Garrison resides—as well as Wisconsin, North Carolina, Minnesota, Mississippi, and Arkansas. Garrison will be "stuck with a tax bill that makes him financially worse off than continuing with his repayment program under PSLF," according to the lawsuit. "He did not ask for cancellation, doesn't want it, and has no way to opt out of it."
https://reason.com/2022/09/27/biden-student-loan-forgiveness-lawsuit-pacific-legal-foundation/
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Missouri Republican Senator Josh Hawley introduced the “Make the Universities Pay Act” on Sept. 21 in the wake of President Joe Biden’s announcement that taxpayers will absorb student loan debt to the tune of at least $400 billion, estimated to cost individual American taxpayers $2,500 each.
“For decades, universities have amassed billion-dollar endowments while teaching nonsense like men can get pregnant. All while charging extortionary tuition,” Senator Hawley stated in a news release.
“Now Joe Biden wants to give away another $1 trillion to prop up the system. That’s wrong. Instead, it’s time to put universities on the hook and give students the information they need to make informed decisions.”
The bill would also qualify student loan debt to be discharged in bankruptcy. Currently, the only debts that are dischargeable include credit card balances, medical bills, personal loans, unpaid utilities and phone bills.
Under Hawley’s six-page proposal, colleges also could not raise tuition to remedy the new expense if approved. The bill prohibits tuition and fee increases unless there is an equivalent percentage decrease in administrative expenses.
"Now look here, you Baltic gas passer... " - Mik, 6/14/08
The saying, "Lite is just one damn thing after another," is a gross understatement. The damn things overlap.
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Missouri Republican Senator Josh Hawley introduced the “Make the Universities Pay Act” on Sept. 21 in the wake of President Joe Biden’s announcement that taxpayers will absorb student loan debt to the tune of at least $400 billion, estimated to cost individual American taxpayers $2,500 each.
“For decades, universities have amassed billion-dollar endowments while teaching nonsense like men can get pregnant. All while charging extortionary tuition,” Senator Hawley stated in a news release.
“Now Joe Biden wants to give away another $1 trillion to prop up the system. That’s wrong. Instead, it’s time to put universities on the hook and give students the information they need to make informed decisions.”
The bill would also qualify student loan debt to be discharged in bankruptcy. Currently, the only debts that are dischargeable include credit card balances, medical bills, personal loans, unpaid utilities and phone bills.
Under Hawley’s six-page proposal, colleges also could not raise tuition to remedy the new expense if approved. The bill prohibits tuition and fee increases unless there is an equivalent percentage decrease in administrative expenses.
@George-K said in Student loan cancellation:
Missouri Republican Senator Josh Hawley introduced the “Make the Universities Pay Act” on Sept. 21 in the wake of President Joe Biden’s announcement that taxpayers will absorb student loan debt to the tune of at least $400 billion, estimated to cost individual American taxpayers $2,500 each.
“For decades, universities have amassed billion-dollar endowments while teaching nonsense like men can get pregnant. All while charging extortionary tuition,” Senator Hawley stated in a news release.
“Now Joe Biden wants to give away another $1 trillion to prop up the system. That’s wrong. Instead, it’s time to put universities on the hook and give students the information they need to make informed decisions.”
The bill would also qualify student loan debt to be discharged in bankruptcy. Currently, the only debts that are dischargeable include credit card balances, medical bills, personal loans, unpaid utilities and phone bills.
Under Hawley’s six-page proposal, colleges also could not raise tuition to remedy the new expense if approved. The bill prohibits tuition and fee increases unless there is an equivalent percentage decrease in administrative expenses.
Hawley's makes more sense than Biden's.
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Missouri Republican Senator Josh Hawley introduced the “Make the Universities Pay Act” on Sept. 21 in the wake of President Joe Biden’s announcement that taxpayers will absorb student loan debt to the tune of at least $400 billion, estimated to cost individual American taxpayers $2,500 each.
“For decades, universities have amassed billion-dollar endowments while teaching nonsense like men can get pregnant. All while charging extortionary tuition,” Senator Hawley stated in a news release.
“Now Joe Biden wants to give away another $1 trillion to prop up the system. That’s wrong. Instead, it’s time to put universities on the hook and give students the information they need to make informed decisions.”
The bill would also qualify student loan debt to be discharged in bankruptcy. Currently, the only debts that are dischargeable include credit card balances, medical bills, personal loans, unpaid utilities and phone bills.
Under Hawley’s six-page proposal, colleges also could not raise tuition to remedy the new expense if approved. The bill prohibits tuition and fee increases unless there is an equivalent percentage decrease in administrative expenses.
@George-K said in Student loan cancellation:
Missouri Republican Senator Josh Hawley introduced the “Make the Universities Pay Act” on Sept. 21 in the wake of President Joe Biden’s announcement that taxpayers will absorb student loan debt to the tune of at least $400 billion, estimated to cost individual American taxpayers $2,500 each.
“For decades, universities have amassed billion-dollar endowments while teaching nonsense like men can get pregnant. All while charging extortionary tuition,” Senator Hawley stated in a news release.
“Now Joe Biden wants to give away another $1 trillion to prop up the system. That’s wrong. Instead, it’s time to put universities on the hook and give students the information they need to make informed decisions.”
The bill would also qualify student loan debt to be discharged in bankruptcy. Currently, the only debts that are dischargeable include credit card balances, medical bills, personal loans, unpaid utilities and phone bills.
Under Hawley’s six-page proposal, colleges also could not raise tuition to remedy the new expense if approved. The bill prohibits tuition and fee increases unless there is an equivalent percentage decrease in administrative expenses.
Making student loans dischargeable in bankruptcy is appropriate and the best possible reform. Everything else I read there is hyperbole and in some ways counterproductive.
Let the banks have to actually take a risk on each college loan. This will lower the number and amounts of loans given and will necessitate tuition and educational reform from the schools themselves.
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I wonder what the consensus opinion of formally trained economists is, regarding this economic issue that is directly in their wheelhouse of formal study?
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It is not accurate to say that student loan cannot be discharged in bankruptcy today, there is still a provision in current law that allows student loan to be discharged in bankruptcy where “undue hardship” can be proven.
Since 1976, there have been many revisions to the law that governs student loans with regards to bankruptcy. Someone put together a nice article around this:
https://www.tateesq.com/learn/student-loan-bankruptcy-law-history
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Why are student loans exempt from bankruptcy? Student loans are exempt from bankruptcy because many politicians feared that young people would borrow substantial sums to pay for college and then discharge their student loans in bankruptcy right after graduation. As a result, starting in the early 1970s, Congress began changing the bankruptcy laws to require a borrower to prove undue hardship before she could discharge her student loan debt.
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@jon-nyc said in Student loan cancellation:
@Horace Don’t know about consensus but PD chimed in next door when this first came out.
Ah, the man who never met a conservative idea or a Republican he liked...
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@jon-nyc said in Student loan cancellation:
@Horace Don’t know about consensus but PD chimed in next door when this first came out.
Ah, the man who never met a conservative idea or a Republican he liked...
@Jolly said in Student loan cancellation:
@jon-nyc said in Student loan cancellation:
@Horace Don’t know about consensus but PD chimed in next door when this first came out.
Ah, the man who never met a conservative idea or a Republican he liked...
Self described middle grounders who will never again publicly support a Republican presidential candidate are pretty common around these piano forums. If one were cynical, one might describe such people as social opportunists who will, in all meaningful tests of cultural affiliation, side with the mainstream mob in power.
If the Republicans became the choice of pop culture, where careers or social standing in general could be advanced by publicly making noises to affiliate with them, these people would reliably make those noises.
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Dunno.
I've seen enough of PD's comments to know he hates conservatives.
at McDonald's.
