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Elizabeth Warren wants to cancel a gigantic portion of student loans (1 Viewer)
- Thread starter supermike80
- Start date
Joe Summer
Footballguy
The military is a great option for younger people. But Warren's proposal is aimed at people who already went to college and haven't been able to find a job that puts a dent in their student loans. For many of those people, the military isn't a viable option -- often because they're too old to join, or because they have a family that can't be uprooted, or because they have a physical or mental condition that would disqualify them for service.
Gawain
Footballguy
While I agree with the above and I disagree with Warren's proposal, 63% of defaulted student loans come from those people who started, but didn't complete college.Maurile Tremblay said:
63 %
The average increase median yearly wage from high school graduate to some college is only $3,000. The average increase median yearly wage from high school graduate to bachelor's degree is $19,800.
Young worker median wages
Warren's proposal probably helps people who dropped out of school the most.
ETA: Added wage link
Last edited by a moderator:
timschochet
Footballguy
Interesting because I think her proposal should be limited, at least for the time being, to those who are not in default.
https://nycfuture.org/research/for-profit-schools-driving-student-loan-default-in-new-york
For profit schools are responsible for a disproportionate amount of student loan default. These are the same schools that DeVos wants to rescue. Many of these schools target vulnerable people. Some are outright scams.
Gawain
Footballguy
I don't disagree with the assertions in the first, third and fourth sentences of your post.
However, there are already mechanisms in place for students who have been harmed by for-profit colleges to apply for relief. The same federal student loan protections (IBR/PSFL) apply to folks with loans from the government for these for-profit schools. The government is telling people how to get loans for DeVry waived, for example.
In my opinion, the growth in for-profit schools directly correlates with the increase in federal student loan aid. To eliminate for-profit schools, the government needs to tighten up lending requirements. This tightening most likely limits funds disproportionally for minority populations.
IvanKaramazov
Footballguy
This is correct. A lot of for-profit schools exist for the sole purpose of siphoning off as many federal student loans as possible. That's literally their business model. Link.
(Please note that "for-profit" is entirely different than "private." The US has a very large number of excellent not-for-profit private colleges and universities. They're not the problem.)
HellToupee
Footballguy
Look at Harvard , 38 billion endowment and they’re tax exempt. Maybe part of the solution is to look at schools that are part of the problem. I don’t know , just spitballing
parasaurolophus
Footballguy
This is kind of like payday loan argument. Take it away and people that cant get in to other schools or meet the timelines would get pissed.
Is this the official Elizabeth Warren thread? It’s the first thread about her I saw.
I agree with this article:
https://niskanencenter.org/blog/elizabeth-warren-wants-an-industrial-policy-here-are-the-traps-to-avoid/
Summary: Some of Warren’s ideas about trade are almost Trump-level bad, but the article chooses not to say so in such direct terms.
I agree with this article:
https://niskanencenter.org/blog/elizabeth-warren-wants-an-industrial-policy-here-are-the-traps-to-avoid/
Summary: Some of Warren’s ideas about trade are almost Trump-level bad, but the article chooses not to say so in such direct terms.
Sand
Footballguy
Probably the best place to put this. Good article on the current state of student loans. Horrible default profiles, a poorly designed repayment plan, no ability for the CBO to assess loan risk. It seems the previous administration put in zero thought on how to protect the taxpayer here.
Juxtatarot
Footballguy
Now, after reading all that, think about the arguments frequently made here about wanting student loans to be able to be discharged through bankruptcy. I've argued before that it would be a financial bloodbath.
The Commish
Footballguy
This all started decades ago and continues to get worse. The misinformation around this stuff is as confusing as the process itself and that too is a result of decades of politicians with no financial prowess trying to come up with a financial system....it is never going to be successful unless/until there is a reset of some sort and they rebuild the whole thing.
Gawain
Footballguy
This belongs here
Cancelling student loans isn't the proper answer. If the only goal is to stimulate the economy, unsecured debt in general is the way to go. If we want to reinvent how we pay for school, a one time infusion of cash is only going to keep costs spiraling out of control.
Sand
Footballguy
This is obvious, but not something the free cash crowd wants to hear.
In a system awash with cash and the resultant cost explosion putting more money is ludicrous. Not to mention for the population supposedly most affected, millenials, with their current sending habits the result of this debt relief would just be more headroom for discretionary spending debt. For this group to have more CC debt than anything else is crazy.
Juxtatarot
Footballguy
Presumably car loan debt is a chunk of that. Frankly, I don’t find that average all that troubling.
beef
Footballguy
Forgiving Student Debt Would Boost Economy, Economists Say
Still not sure what side I'm on when it come to forgiveness. I'm definitely on board with low to minimal student loan interest rates.
Still not sure what side I'm on when it come to forgiveness. I'm definitely on board with low to minimal student loan interest rates.
Juxtatarot
Footballguy
Mario Kart
Footballguy
Having student loans at, what, 6.9% or something like that is absurd. Student loans at 2.9% or lower is much more cost effective, imo. As far as a student loan bailout... I'm thinking a $10k - $15k bailout is a good start. $50k, is something I have heard get tossed around, is too high, imo. I paid my student loans off and I'd like to go back to school. If student loans are given a $10k break... I want $10k to go back to school. If people will complain about that $10k - $15k "bailout," well, what is there to complain about?
beef
Footballguy
I could be on board with this.
Also like the idea for those who already paid off their loans to give them something towards grad credits/continuing education. Extended Pell Grant or some new grant.
Sand
Footballguy
I am, as well. If we go the other direction and cancel loans (horrible idea) and the govt. keeps the guarantee on the books we need to price these loans at the risk they truly represent - unsecured personal obligation loans. 15-20% is about the right rate here. The taxpayer should not bear the burden of these ill considered loans.beef said:
beef
Footballguy
Thats my biggest struggle with all this. Don't make it a burden for everyone, and make sure those who used these loans are accountable for them. Graduate and you get that low prime rate. Drop out, don't finish, and it's a higher adjustable rate to help balance it out. I'm sure there are some flaws with that and a lot more to consider though.
Henry Ford
Footballguy
I'm toying with the idea that if you make full payments for five years, the government picks it up and charges zero interest from that point forward might make sense. Still have to pay off all principal, but we could get rid of most of those "pay regularly for 30 years and whatever you owe disappears" deals and still grant some relief.
