Bernie Tweeting #CancelStudentDebt

joedirt wrote:

Why would anyone with a worthwhile degree get a 2nd job? 2nd jobs are not for professionals. The only profession where I could see someone with a second job would be a teacher that does a side job during their extended summer vacation. If you work hard and get a degree in a decent field, there is no reason to have 2 jobs in todays economy.

Because that “worthwhile degree” didn’t get them a job sufficient to pay off their debt while maintaining the spending habits they have.

Most students are getting loans with interest rates between 6-10%...the "subsidized" federal loans are on the 6% side, and the private loans most kids have to get are on the 8-10% side....Its criminal considering the interest rates you get on a mortgage...

It’s criminal because they are virtually impossible to discharge.

Free_the_thigh wrote:

28 year old engineer wrote:

Most students are getting loans with interest rates between 6-10%...the "subsidized" federal loans are on the 6% side, and the private loans most kids have to get are on the 8-10% side....Its criminal considering the interest rates you get on a mortgage...

It’s criminal because they are virtually impossible to discharge.

Yes, but that’s largely because the degrees and the earnings potential they confer can’t be repossessed. The American taxpayer should not be on the hook for bailing out a minority segment of society who will have pole vaulter up the socioeconomic hierarchy through ill gotten gains.

The beneficiaries of our student loan policies are: 1) the Government - student loans are one of the few assets on Government books, and 2) more significantly, the academic industrial complex, with burgeoning administrations and empires largely paid for by students (err..loan conduits).

The members of the academic industrial complex vote virtually one way - to the tune of 95% or more. They also (like Hollywood) exploit classes of workers tremendously. Ask any adjunct or grad student about just how exploited and vulnerable they find themselves. The big con the academic industrial complex perpetrates is that the product they sell is always valuable no matter the cost or its practical application. Neither Warren's plan (a subsidy for the middle class above all else) or Sander's plan (a subsidy to everyone) will fix the problems with the academic industrial class - in fact - these plans will likely enable them even more than now.

Don't take this note as indicating conservatives care much about students - I don't think they do. But the current system - completely privatized by the Government under the Obama administration - harms students - and worse, harms students from the middle class, all to enrich a class of voters which deliver like no other.

What the eff does the Obama Administration have to do with escalating college cost? You think this spiked only then? You're nuts.

How about you address the Pell Grant program, started in 1973 under Nixon? Go ahead, we're waiting.

Free_the_thigh wrote:

Because that “worthwhile degree” didn’t get them a job sufficient to pay off their debt while maintaining the spending habits they have.

For perspective, I graduated in the late 90s with $16k in debt. My starting salary with a degree in engineering from a respected school was $35k a year, which was about average. The average undergrad debt from a public institution today is $29,800 (which is slightly more than the $25k my $16k would be worth in todays dollars) and the average starting salary for engineering graduates is about $62,500. So while the debt has increased by 86.3% during that time period, the starting salary has increased by 78.6%, which is not too far displaced from what one might expect. Sounds to me like they need to adjust their spending habits more than anything. They won't get much sympathy from me as I lived cheap my entire life [shared apartments in cheap locations, cooked most all my meals, did not own a car until I was 23 and always drove cheap used cars (which I still do to this day) and never wore designer anything or owned any status symbols]. Debt is part of a person's financial education.

Good analysis - thanks for posting it. Some followup questions:

- Did the overall state budget stay roughly constant, or are the denominators for the ~14% spent on schools changing?

- What are the raw $ impacts of the 25% increase in faculty spending and scholarships?

M|BM

My Federal subsidized loans were 3-4%. Taken out in 2012-2016.

I don’t think this is just conservatives not caring, it’s just we know the real story behind student debt loads for a huge swath of these debt holders. In my own experience, which I hate to use because it’s anecdotal, I graduated debt free, but I went to junior college, lived with my parents, commuted, and worked 25-30 hours a week busting my ass in a warehouse. I was very much the exception as almost all my classmates subsidized their on campus “college experience” lifestyle with loans and now that it’s time to pay the bill, they can’t be bothered to sacrifice any lifestyle choices such as travel, clubbing, or eating out so that they can pay back their debt.

28 year old engineer wrote:

Most students are getting loans with interest rates between 6-10%...the "subsidized" federal loans are on the 6% side, and the private loans most kids have to get are on the 8-10% side....Its criminal considering the interest rates you get on a mortgage...

You are right. Of course to make it fair, if you don't pay back the loan the government should be able to seize your assets to pay the bill just like a mortgage. Between taking a kidney, a lung, and some liver tissue, there should be no problem in paying off the debt if you default.

First of all, I am far from nuts. Very, very few could approach the education level I have obtained, including definitely you. Lots of background in law and economics, and successful because I have acutely observed (as a poor person who succeeded) the antics of groups who don't look out for formerly poor people like me (i.e., elites, many of whom are in government and academia). You can call people like me nuts, but trusting these big Government and big Academia institutions doesn't make a lick of sense to me. You can at times get what you need from these institutions, but at the end of the day, you can't let them burn you. And burning is exactly what happens all too often to trusting students. And we are talking about people who are 18 making decisions which negatively impact them for decades. And it is not nuts to look at the rent seeking behavior of the academic industrial complex - they are by and large fine with this system. But it is an untenable one.

The problem didn't start with the Obama administration. But his administration made this awful system an entirely Government run enterprise. So it is relevant and matters. This is not nuts, especially since it made one of the worst features of the student loan program - non-dischargeability in any kind of proceeding - embedded deeply within a government bureaucracy. By the way, I agreed with the Obama administration's actions against for profit colleges - most of them (not all) are a rip-off, manipulating and crushing in many cases marginal students. But the Obama administration didn't go for enough - the traditional eco-system has far too many rip-off institutions. I recall a few years back the President of Boise State lobbying in DC to apply anti-trust sanctions against the NCAA football BCS system. His school then had a four year graduation rate of 4.7 percent (it has improved). And people borrow to attend institutions with these kind of results, and these kind of priorities? Again, questioning this is hardly nuts, and likely reflects an emotional pattern of thinking with very little regard for middle class people and ordinary consumer welfare.

When I graduated from my fancy and completely over-credentialed law school (trading futures to pay for the tuition), tuition was $12,000 a year. Inflation adjusted, it should be today around $23,000. But it is not - it is over $45,000 a year - and that excludes living expenses in a very expensive city. It is a great example, because my alumni connections confirm that the education is no different today from when I attended - but of course tuition has grown greatly in excess of inflation. The school can do so because 60 plus percent of the class takes out outrageous loans using students living the dream as conduits, ironically as law students taking on debt with the worst terms in the civilized world. Now, law students are not easy people to feel sorry for, but numerous people are entering into absolutely stupid financial arrangements because of federal loan policies. And the beneficiaries - who at this school are all SJW's - have no qualms about receiving the benefits of this arrangement. Keep all of this mind when relieving loan debt - you will have many Skadden Arps associates jumping for joy - hardly the group I think of when considering social justice.

just an FYI for both of you:

ThillyThally wrote:

Free_the_thigh wrote:

It’s criminal because they are virtually impossible to discharge.

The American taxpayer should not be on the hook for bailing out a minority segment of society who will have pole vaulter up the socioeconomic hierarchy through ill gotten gains.

The American taxpayer has been bailing out corporations and big banks for years, not to mention the laughable amount of corporate welfare that gets passed around. The government could at least re-finance everyone to an ultra low/zero interest rate or raise the ceiling on deducting interest paid on student loans.

One of the biggest scams ever pulled off is the one where Republicans and big businesses managed to convince the average American that bailing out and giving massive tax breaks to multi-billion dollar companies is a "necessary evil" but even the smallest whiff of help from the government for the average middle-class American is a total moral crisis and will surely set a bad precedent

Since the lat 1980s, wages have barely increased while college has doubled in price. While it was possible to work and pay your way through school back then, it is impossible now. The price of college is currently increasing 8 times faster than wages. No amount of financial literacy can bridge this disconnect.

Americas largest corporations should foot this bill who are currently vastly undertaxed; i.e, Amazon paying $0 in federal taxes.

sources:

http://fortune.com/2019/02/14/amazon-doesnt-pay-federal-taxes-2019/

https://fred.stlouisfed.org/series/MEHOINUSA672N

https://nces.ed.gov/fastfacts/

This is a false equivalence. Most corporations and big banks are publicly held and the entire economy depends on them not being run into the ground. Like it or not, all our fates are intertwined with the economy. The case that all our fates are intertwined with student loan holders is a lot less convincing. The issue isn’t even that these people will necessarily default, it’s unfounded outrage that they actually have to pay back the money they were all too eager to take.

Look, I get that tuition costs have been going up to ridiculously high levels, and that interest rates on student loans have increased.

BUT

If you signed on the dotted line to get a loan to pay for your education, you entered into a legal contract. Therefore, you must pay the money back - just like a mortgage or car loan.

This has NOTHING to do with college being a "requirement" now. That's a red herring. Same with the argument that you were sold a lie. No, you weren't.

What's criminal to me is that we have new adults (18-20 year olds) who are signing up to a future financial obligation with little to no financial education. How in the world does that happen? If the schools aren't doing it, why the heck aren't the parents doing it? I know that I've provided my kids with the financial tools to understand future financial obligations versus average income levels of their potential career choices. It isn't that hard to do, and you have an obligation to your children to ensure that they know enough to understand simple math and an understanding of how interest works.

So, now we have people blaming the government or the universities for their own stupidity or negligence.

Just pay the tab, man.

What Bernie (and others) are doing is pandering to the young vote by throwing money at them. Not quite literally, but close enough for government work.

TAA wrote:

My Federal subsidized loans were 3-4%. Taken out in 2012-2016.

The problem here also is the "subsidized" loans are very limited maximum $3500 for your first year. The interest on my unsubsidized federal loan was 6.5% in 2009 and subsidized 5.9% (I only got $1500 because my family was not super poor), but the private loan I had to take to pay for the rest of what I owed for school was at 8.5% , most of my friends in similar situations had interest rates between 8-10%...these private loans and unsubsidized loans all accrue interest while you are in school, so a very small amount that does not is the subsidized portion, which is capped at $3500 and dependent on your family's estimated contribution, so often less than that. The government assumes because your parents claim you on their taxes that they are going to pay toward your college, and this affects your ability to get decent loans.

The interest rate has moved and now is climbing again to where it was when I was in school (except now sub and unsub is the same) according to the internet the current rate for a fed loan is 5% ... I would say the lowest any student loan is going to get is 5%...and I got a used car loan for 2.2% on an 8 year old car....and my house has a 3.75% interest rate....but my engineering degree the most valuable thing I've ever borrowed to receive, 8.5%... go figure... its criminal.... The government makes billions off of student loan interest.

Here is the interest rates over time:

So the standards you are applying to teenagers, do you also apply that standard to farmers who cannot turn a profit without government handouts?