Why is Biden extending the student loan repayment pause?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Pp your comment about boomers missss the larger issue. Before federal loans were so available, the cost to go was less. More federal loans and grants has only increased the cost for everyone because the new “zero” assumes you have gotten the loans. There shouldn’t be any more loans or forgiveness available until colleges and universities are forced to tighten their belts. If that doesn’t happen, all that will happen is tuition will continue to ride because the faucet if federal money will just keep flowing. College has been experiencing outpaced inflation for Decades because of the flow of federa money. We are now seeing the same issue across the economy broadly and we are upset. But the same economic forces (federal cash) have resulted in skyrocketing tuition. It wasn’t the intent but it is the outcome. And it needs to be stopped before any more money flows.

I agree that colleges should be held responsible and tighten their belts. But that would require a bipartisan solution and the GOP isn't playing ball on anything, since they are in the pocket of scam for-profit colleges and behemoth student loan churners like Liberty University.

The solution would be requiring colleges to hold risk retention on 10% of the loans they originate so that students, colleges, and the US taxpayers have aligned incentives. Then make a requirement that participation in federal student loans requires a freeze on tuition and fees for 5 years, after which cost may increase in line with inflation.

The 5 years of budget tightening will drastically downsize the mid-level administrators, plus the bloated salaries for university presidents and major sports coaches.

Colleges are already rewarded or dinged on their cohort default rate. I’d argue that should be more severe.

I am pretty sure the colleges with the worst default rates are local community colleges (no admissions bar) and local regional/commuter public universities (very low admissions bar). If you try to force them to raise their admissions bar you're going to get viral cries of racism very, very quickly.

[Anonymous]

They need to make student loans subject to bankruptcy. The government should only do back Federal Loans for URM or first time college attendance. Banks would tighten leading if there was risk involved.

[Anonymous]

Anonymous wrote:They need to make student loans subject to bankruptcy. The government should only do back Federal Loans for URM or first time college attendance. Banks would tighten leading if there was risk involved.

And.. want to add… uni costs would go down or at least not go up

[Anonymous]

Anonymous wrote:They need to make student loans subject to bankruptcy. The government should only do back Federal Loans for URM or first time college attendance. Banks would tighten leading if there was risk involved.

Private loans (such as Discover or Sallie Mae) are subject to bankruptcy via the Bruner test. Federal loans are not, you are correct.

[Anonymous]

Anonymous wrote:"The solution would be requiring colleges to hold risk retention on 10% of the loans they originate so that students, colleges, and the US taxpayers have aligned incentives. Then make a requirement that participation in federal student loans requires a freeze on tuition and fees for 5 years, after which cost may increase in line with inflation.

The 5 years of budget tightening will drastically downsize the mid-level administrators, plus the bloated salaries for university presidents and major sports"


This is a much more palatable solution.

Just tie the availability of student loans, pell grants, and parent plus loans with bankruptcy protections to tuition. If a school wants to take the loans, then tuition is capped at X times the federal loan limit. If the school doesn't like it, they can exist without loans.

[Anonymous]

Anonymous wrote:

Anonymous wrote:They need to make student loans subject to bankruptcy. The government should only do back Federal Loans for URM or first time college attendance. Banks would tighten leading if there was risk involved.

Private loans (such as Discover or Sallie Mae) are subject to bankruptcy via the Bruner test. Federal loans are not, you are correct.

That's still a lot ore protection that regular consumer debt

[Anonymous]

This is as well thought out as Biden’s border strategy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:They need to make student loans subject to bankruptcy. The government should only do back Federal Loans for URM or first time college attendance. Banks would tighten leading if there was risk involved.

Private loans (such as Discover or Sallie Mae) are subject to bankruptcy via the Bruner test. Federal loans are not, you are correct.

That's still a lot ore protection that regular consumer debt

Regular consumer debt can be discharged in bankruptcy, but credit card interest is way higher than student loan (at least fixed interest ones, which is most of them). Private student loans are dischargeable in bankruptcy in rare circumstances, they do not have federal protections; you had to keep paying if you had them during covid pause unless your individual lender said otherwise. No PSLF, IBR or BDR for private loans. Federal loans are not dischargeable in bankruptcy but have better protections, however they are garnisheable. You can “settle” private loans in some states; it hurts your credit though.

So pros and cons to all.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Pp your comment about boomers missss the larger issue. Before federal loans were so available, the cost to go was less. More federal loans and grants has only increased the cost for everyone because the new “zero” assumes you have gotten the loans. There shouldn’t be any more loans or forgiveness available until colleges and universities are forced to tighten their belts. If that doesn’t happen, all that will happen is tuition will continue to ride because the faucet if federal money will just keep flowing. College has been experiencing outpaced inflation for Decades because of the flow of federa money. We are now seeing the same issue across the economy broadly and we are upset. But the same economic forces (federal cash) have resulted in skyrocketing tuition. It wasn’t the intent but it is the outcome. And it needs to be stopped before any more money flows.

I agree that colleges should be held responsible and tighten their belts. But that would require a bipartisan solution and the GOP isn't playing ball on anything, since they are in the pocket of scam for-profit colleges and behemoth student loan churners like Liberty University.

The solution would be requiring colleges to hold risk retention on 10% of the loans they originate so that students, colleges, and the US taxpayers have aligned incentives. Then make a requirement that participation in federal student loans requires a freeze on tuition and fees for 5 years, after which cost may increase in line with inflation.

The 5 years of budget tightening will drastically downsize the mid-level administrators, plus the bloated salaries for university presidents and major sports coaches.

Colleges are already rewarded or dinged on their cohort default rate. I’d argue that should be more severe.

I am pretty sure the colleges with the worst default rates are local community colleges (no admissions bar) and local regional/commuter public universities (very low admissions bar). If you try to force them to raise their admissions bar you're going to get viral cries of racism very, very quickly.

I don’t think true. Tuition at community colleges is often less than the Pell Grants so for many families there’s no loan at all. There are also many knstitutionsl grants available snd many states offer free community college programs. Community colleges also house do many workforce training programs that a kid can transition to if they decide to leave a credit program.

[Anonymous]

A decent state school - think one of the UCs or Penn State - is realistically $40K+ per year once you live on campus and get a meal plan.

What kind of smart, working class kids can afford that? Absolutely none. And they should aspire to more than community college if they have the chops to succeed at a 4-year college.

Not to mention the crazy inflation at private universities.

[Anonymous]

If you need that the federal government forgive your student loans you are a looser not matters what is your degree in and profession. Student loans forgiveness is so inmoral. I bet you those people a year after those loans get forgiven they will hold more debt that the erased loans.

[Anonymous]

Anonymous wrote:If you need that the federal government forgive your student loans you are a looser not matters what is your degree in and profession. Student loans forgiveness is so inmoral. I bet you those people a year after those loans get forgiven they will hold more debt that the erased loans.

Well, they will likely go out and get mortgages. That’s great for the country’s economy.

[Anonymous]

Anonymous wrote:I don't see him doing a $1.6 trillion jubilee. I assume it'll be $10k for all federal borrowers under X household income. But jeez, $10k really isn't much these days with what real estate has done in 28 months, but better late than ever, I guess? Feel sorry for anyone under age 40, it's just been one set back after another since they were in college. The president finally gives you some student loan relief... but a basic starter house costs literally $100k more than it did a year ago!

$10K in forgiveness will wipe out the student debt for something like 10,000,000 Americans. It’s pretty wild how so little forgiveness could have a big impact.

[Anonymous]

Anonymous wrote:A decent state school - think one of the UCs or Penn State - is realistically $40K+ per year once you live on campus and get a meal plan.

What kind of smart, working class kids can afford that? Absolutely none. And they should aspire to more than community college if they have the chops to succeed at a 4-year college.

Not to mention the crazy inflation at private universities.

Agreed. Funny that you mention Penn State; I grew up in Pa and had to turn it down because it was too expensive. Who the heck can afford that? (It was expensive even 8 years ago). Went to a much lesser PA state school and always felt a little bitter over that, although I guess I’m fine now.

[Anonymous]

Anonymous wrote:If you need that the federal government forgive your student loans you are a looser not matters what is your degree in and profession. Student loans forgiveness is so inmoral. I bet you those people a year after those loans get forgiven they will hold more debt that the erased loans.

Prosperity gospel, huh?