any cons in suspended student loans debt?

[Anonymous]

Anonymous wrote:

Anonymous wrote:How about a middle ground. Pay back your loans but make it interest free. People should pay back what they take out, not pay back three times what they take out even when faithfully making monthly payments.

What happens to the bond funds holding these student loan asset backed securities? A lot of retirement funds hold these securities.

And what happens to the next group of students who wants to take out a loan but no one will lend to them because there’s no profit incentive to take that risk?

[Anonymous]

Yes, a major negative with suspending student loan debt repayment is that when the federal government does not get repaid, they have less money to spend on other programs including lending money to younger students for them to go to college.

While I understand why some want their student loan debt suspended or canceled, the only way that this will have support outside of progressive circles is if you put an income cap on the HHI of the borrowers. The current median salary in the US is $51.9K. The current median HHI is $67.5K. So put a salary cap of $50K annual individual or $65K annual HHI and only individuals or families who fall under those limits would be eligible for student loan suspension or cancelation. This means that relatively few who live in major cities would be eligible. The higher COL in those areas mean salaries are typically well above the national average and would exclude them from the benefits.

But, it is very galling for the average American who makes around those figures to see their taxes going to bail out people making more money than they do from paying their debts.

[Anonymous]

I’ve been a Dem for 34 years. This loan forgiveness issue is what is starting to make me a one issue voter for the first time (like abortion for some). If a candidate says their goal is to forgive student loans, I’m voting for (and likely campaigning for) the other candidate.

You took on the loan. Pay it back.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How about a middle ground. Pay back your loans but make it interest free. People should pay back what they take out, not pay back three times what they take out even when faithfully making monthly payments.

What happens to the bond funds holding these student loan asset backed securities? A lot of retirement funds hold these securities.

And what happens to the next group of students who wants to take out a loan but no one will lend to them because there’s no profit incentive to take that risk?

Dp- well hopefully the next group will have fewer students.
College isn’t for everyone. We need to shift back to trade schools and industry trained workforces.
Also: maybe colleges wouldn’t be able to demand so much for tuition. The price of college has skyrocketed because of all the free money.

[Anonymous]

What happens to the people that paid for college on their own, why shouldn't they get a handout

[Anonymous]

Anonymous wrote:What happens to the people that paid for college on their own, why shouldn't they get a handout

Or who didn’t take on loans by not going to college? Yeah, life isn’t fair but I don’t see how any candidate can expect to go far running on college loan forgiveness. It rewards bad behavior. Ever since Bernie, his followers have been waiting and feeling entitled to have their loans just magically wiped away. Once they got that idea into their head they haven’t been able to let it go.

[Anonymous]

Yes, a major negative with suspending student loan debt repayment is that when the federal government does not get repaid, they have less money to spend on other programs including lending money to younger students for them to go to college.

This. The money has to come from somewhere. And, for those who have not yet noticed, the federal government has a pretty serious debt problem of its own. We don't have the money to do this even if it were a good idea.

And it isn't a good idea. Moral hazard, contracts, regressive policy, and all that. Also, paying back student loans doesn't improve the country in any way--we don't get any more educated people. It would be better, if we had the money (which we don't), to subsidize the education of future generations.

I do agree that we need to to a better job of educating students who are considering taking out student loans. I also agree that we should make it easier to discharge said loans in bankruptcy. But I completely oppose taking money from responsible people to pay off loans for others.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How about a middle ground. Pay back your loans but make it interest free. People should pay back what they take out, not pay back three times what they take out even when faithfully making monthly payments.

What happens to the bond funds holding these student loan asset backed securities? A lot of retirement funds hold these securities.

And what happens to the next group of students who wants to take out a loan but no one will lend to them because there’s no profit incentive to take that risk?

Dp- well hopefully the next group will have fewer students.
College isn’t for everyone. We need to shift back to trade schools and industry trained workforces.
Also: maybe colleges wouldn’t be able to demand so much for tuition. The price of college has skyrocketed because of all the free money.

Well, I think we have our answer then.

Set all existing and future loans at 0% interest active immediately.
The current generation of borrowers will have relief and light at the end of the tunnel.

The next generation will be spared the crisis, as lenders won't be so predatory to unsuspecting 18-year-olds, and in turn colleges will be forced to lower their tuitions. Meanwhile, more students will learn from the crisis of their older brothers and sisters and consider other options unlike what parents in the 1990s did, which is say that college was everything and that if you didn't go to college, your career would be at McDonalds.

I'll also add in the mix that financial literacy must be taught in schools! I hate the argument that it's parents' responsibility. In a perfect world, sure, every parent will be able to inform their children about saving, balancing a budget, loans, and investing. But why perpetuate class structure and poverty? If a child's parents happen to lack financial skills, why should the child inherit the disadvantage with respect to her peers? Financial education from an early age would level the playing field and be a great equalizer for a true meritocracy.

[Anonymous]

A few things would help the situation now and in the future. Immediately. All interest rates need to be lowered to a manageable level. One of my friends has a 20% interest rate. If that was lowered to even five or 8% that would be helpful. I got mine repaid back when they were all 2%.
Next we need to put a cap on college fees and the amount that can be borrowed. Say no more than 10% over an annual tuition cost at that specific college. I have a friend who took out thousands more each semester and now is struggling to pay it back because she didn't understand what she was doing at the time.
Which brings me to third. There needs to be financial education in all high schools and the first year of college talking about interest rates and exactly how to pay back college loans and refinancing options.

[Anonymous]

Anonymous wrote:A few things would help the situation now and in the future. Immediately. All interest rates need to be lowered to a manageable level. One of my friends has a 20% interest rate. If that was lowered to even five or 8% that would be helpful. I got mine repaid back when they were all 2%.
Next we need to put a cap on college fees and the amount that can be borrowed. Say no more than 10% over an annual tuition cost at that specific college. I have a friend who took out thousands more each semester and now is struggling to pay it back because she didn't understand what she was doing at the time.
Which brings me to third. There needs to be financial education in all high schools and the first year of college talking about interest rates and exactly how to pay back college loans and refinancing options.

This became a "crisis" during Obama's term when the federal government took over student loans.
https://www.investors.com/politics/editorials/obama-created-student-loan-crisis-with-1-trillion-in-loans/

Prior to this horrible legislation, the interest rates on loans were much more competitive.
So, you can thank Obama.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How about a middle ground. Pay back your loans but make it interest free. People should pay back what they take out, not pay back three times what they take out even when faithfully making monthly payments.

What happens to the bond funds holding these student loan asset backed securities? A lot of retirement funds hold these securities.

And what happens to the next group of students who wants to take out a loan but no one will lend to them because there’s no profit incentive to take that risk?

Dp- well hopefully the next group will have fewer students.
College isn’t for everyone. We need to shift back to trade schools and industry trained workforces.
Also: maybe colleges wouldn’t be able to demand so much for tuition. The price of college has skyrocketed because of all the free money.

Well, I think we have our answer then.

Set all existing and future loans at 0% interest active immediately.
The current generation of borrowers will have relief and light at the end of the tunnel.

The next generation will be spared the crisis, as lenders won't be so predatory to unsuspecting 18-year-olds, and in turn colleges will be forced to lower their tuitions. Meanwhile, more students will learn from the crisis of their older brothers and sisters and consider other options unlike what parents in the 1990s did, which is say that college was everything and that if you didn't go to college, your career would be at McDonalds.

I'll also add in the mix that financial literacy must be taught in schools! I hate the argument that it's parents' responsibility. In a perfect world, sure, every parent will be able to inform their children about saving, balancing a budget, loans, and investing. But why perpetuate class structure and poverty? If a child's parents happen to lack financial skills, why should the child inherit the disadvantage with respect to her peers? Financial education from an early age would level the playing field and be a great equalizer for a true meritocracy.

A note about financial literacy. If you fix the student loan rates at 0%, a bank is not going to offer student loans. They have no possibility of offsetting riskier loans that may default. It's a losing proposition for them in the aggregate.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How about a middle ground. Pay back your loans but make it interest free. People should pay back what they take out, not pay back three times what they take out even when faithfully making monthly payments.

What happens to the bond funds holding these student loan asset backed securities? A lot of retirement funds hold these securities.

And what happens to the next group of students who wants to take out a loan but no one will lend to them because there’s no profit incentive to take that risk?

Exactly. While I hate to generationalize this - if that is a word - it really speaks to the millennial stereotype of me, me, me. There isn't concern for the past generations that paid their way or the future generations that will have to figure out how to pay their way without loans. It is just about me....I took out huge loans that I didn't educate myself on and now I can't go to concerts and buy lattes every day.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:any cons in suspended student loans debt? ?

GDP will go way down if they are not suspended. For an example I am looking forward in going to a concert, and spending more and more money, I will be unable to do this if they are not suspended.

Inflation is already sky high. Restarting student loan repayments is the key to reducing inflation, as millions of people like you, will have less money to spend on goods.

+100

Are you serious? Inflation is high, but it ain't sky high. You must not have been born in the 60s or 70s when inflation was sky high.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:any cons in suspended student loans debt? ?

GDP will go way down if they are not suspended. For an example I am looking forward in going to a concert, and spending more and more money, I will be unable to do this if they are not suspended.

Inflation is already sky high. Restarting student loan repayments is the key to reducing inflation, as millions of people like you, will have less money to spend on goods.

+100

Are you serious? Inflation is high, but it ain't sky high. You must not have been born in the 60s or 70s when inflation was sky high.

Don’t worry, Uncle Biden will take us there.

[Anonymous]

Cry harder, cons. It's happening - deal with it.