Student loan forgiveness plan can move forward, federal judge allows

22 pointsposted a year ago
by Anon84
(cnbc.com)

30 Comments

dmitrygr

a year ago

I feel like such a chump actually working throughout my college years and paying for my own college.

I will be sure to teach my kids to not repeat my mistakes.

tetromino_

a year ago

When exactly were your college years? College tuition has been growing by 3.6% per year. Rent had been growing by about 3.5% per year, and has accelerated higher recently. If you were accepted to the same university today, and worked the same sort of jobs that you worked back then, would you still be able to afford it?

dmitrygr

a year ago

2005-2008

I was running a contract software development business, so yes, i would.

leereeves

a year ago

I went back to graduate school a few years ago and tuition was very affordable.

Rent would have been difficult to afford, but it's hard to see any reason the government should fund student's rent in particular while other people have to pay.

tetromino_

a year ago

> it's hard to see any reason the government should fund student's rent in particular while other people have to pay

The government disagrees, and has decreed that a student's rent (a.k.a. "room and board") is, along with tuition and books, one of the expenses that student loans can be used to pay for.

olliej

a year ago

“It was hard for me so it should be hard for everyone else forever”?

Try it with other examples: “when I had cancer the only treatment was really harsh chemo, the new drugs today make it way easier and that’s unfair”

dmitrygr

a year ago

You really don’t see the difference?

New chemo was not available back then. Having a job is not a new concept.

effingwewt

a year ago

You are missing the forest for the trees.

You are simply mad it doesn't benefit you directly, the problem with most people nowadays.

I also paid mine back, but I'm glad this is happening. I'm also angry we don't use the funds for ie veterans instead and I also would like reform with the bailout.

As you can hopefully see it's a very nuanced issue and you can't let the perfect be the enemy of the good.

dmitrygr

a year ago

I am mad that I am paying for others' bad decisions, yes! The terms on the loans were clearly explained. They agreed to them.

My action is to teach my kids that in today's world, being responsible is idiotic, since uncle sam will just force those who are responsible to pay for your idiocy anyways!

BriggyDwiggs42

a year ago

Do you think the ratio between an average wage and an average tuition has remained constant lmao

leereeves

a year ago

I graduated undergrad about 20 years ago, and a masters a few years ago.

So I know that, yes, at the school I went to, the ratio between an average wage and an average tuition has remained roughly constant.

BriggyDwiggs42

a year ago

Sorry for being aggressive in my reply, that was unnecessarily mean. That being said, I think you’re suffering from a small sample size. My brief research indicated a sizable increase in tuition over 20 years (2000-2020), four-year schools around 1.5x, that solidly beat inflation. I think the situation has most certainly gotten worse since you were an undergrad.

leereeves

a year ago

There is definitely a wide range of costs from state to state and school to school.

"Average 2023-24 public four-year in-state tuition and fees range from $6,360 in Florida and $6,700 in Wyoming to $17,170 in New Hampshire and $17,180 in Vermont."

https://research.collegeboard.org/trends/college-pricing/hig...

Federal aid should not be subsidizing the high costs in states like Vermont. That's a case of the states abdicating their responsibility to educate their own students affordably, and federal relief would transfer those costs to people in other states.

And even in those expensive states, working through college is still possible. $20k per year is 20 hours per week at $20 per hour, which isn't unobtainable in a HCoL state, assuming the student lives with family.

olliej

a year ago

The cost of going to college, is the cost of:

* Courses

* Books

* Rent

* Utilities

In florida (generally - I don't know where students live when going to uni):

* Courses for an in state public school have increased by 30% (I've always been curious about in-state vs out-of-state - after you move to a state to go to school you're in state? maybe the first year "you're out of state" but after that you're in state, you've been paying taxes in state, voting, etc?)

* Rent seems to have doubled (400-600/mo in 2004 to 1000-1300/mo now) - on campus has increased by "only" 60% but I don't know how common it is

* Utilities seems to have doubled

* Books weirdly seems to have actually stayed stable??! :-O

In the same time student incomes seems to have increased by around 20% (which is about in line with 1.5-2% inflation).

Very roughly - and approximately - the ranges seem to be

2004: Courses: 2800 Rent+Utilities: 10000 Student Earnings: 10-15k (where 15k seemed to be for >30 hours a week)

2024: Courses: 3800 Rent+Utilities: 16000 Student Earnings: 12-18k (where the high end was again people doing >30 hours a week)

So in 2004 the net cash transfer was (-2.8k to 2.2k) vs 2024 where it's (-7.8k to -1.8k). Eg. the best case has gone from not needing a loan to need a loan.

This is of course only for students going to an in state public university - as far as I can make out it seems that's only half of them? (but it's really hard to be sure because it doesn't seem to be easily discoverable - basically I can find lists of what proportion of students at each particular school are in state vs out of state). For out of state you are adding 13-15k to the annual expenses.

dmitrygr

a year ago

I think the ability to read a contract has decreased

APublicMan

a year ago

I feel bad for those who have their lives ruined by student debt without compensating income, but I need some reform with any bailout.

Ancalagon

a year ago

Remove all charges on the debt associated with interest growth over 2-3% per year.

Limit all new student debt to a maximum of 2-3% interest.

Cap tuition everywhere - you could ease into this by the federal government steadily decreasing caps and simultaneously reducing loan amounts.

Put everyone on an income-based payment plan with a guaranteed 10-year payoff timelimit if they make all their payments (reasonable forgiveness on timely payments but more than a month late or so and that gets added on to the end of the 10-year limit).

Not easy for any party, but pretty fair IMHO.

Ekaros

a year ago

2-3% is currently too low. I say just cap it to FED rate + 1%. After all it is government backed so rate should be same as fed rate.

toomuchtodo

a year ago

Congress has no will to reform unfortunately, so you do what you can with what you have. Go forward improves due to pre-college cohorts substantially devaluing a college education and therefore avoiding it (and the loans attached) [1] [2].

To note, some employers are starting to drop the credential requirement [3] [4] [5]. If you can hire without it, why are you asking for it?

[1] https://www.pewresearch.org/social-trends/2024/05/23/is-coll...

[2] https://www.cnbc.com/2024/05/23/is-college-worth-the-cost.ht...

[3] https://www.npr.org/2024/08/26/nx-s1-5084214/why-states-are-...

[4] https://www.highereddive.com/news/nearly-half-of-companies-p...

[5] https://www.cnbc.com/2024/03/22/1-in-3-companies-are-ditchin...

bdcravens

a year ago

I tend to agree, and I'm not against student loan help (I paid my loans off years ago). Something along the lines of tuition caps in order to receive loans backed by the federal government (similar to how insurance companies cap what they pay regardless of what the medical provider bills)

bachmeier

a year ago

That's not how federal student loans work. You can't borrow unlimited amounts to cover any amount of tuition, and unlike insurance companies, it's not the government paying the bill. For instance, you can only get $5500 for the first year. Tuition caps would be an orthogonal policy.

bdcravens

a year ago

I'm aware of the caps and the fact that the loans are backed, not paid, by the government. However, attaching conditions to eligibility is a tool the government can wield.

llamaimperative

a year ago

Just make them dismissable in bankruptcy and the lenders will figure out how to lend responsibly

bachmeier

a year ago

This comes up so much, but there's no need to fight that battle (and it would be a big one). Put a max on the percentage of your income that needs to go to student loan repayment, like 7%, and a time limit on repayment, like 10 or 20 years.

llamaimperative

a year ago

I like this concept! Though I worry how "creative" borrowers could be in suppressing their reportable income through the payback period...

krger

a year ago

The economics of higher education in the United States are definitely ripe for reform—especially for public institutions—but I think we have much better places to be looking for ideas than the health insurance industry.

bdcravens

a year ago

That was just an analogy, not the source of the idea. Government has been playing the carrots and sticks game a lot longer than the insurance industry.

sickofparadox

a year ago

Student loan forgiveness probably one of the most unconscionable financial policies being pursued right now. Extracting wealth from the average person and giving it to the top 25% of lifetime earners, all over debt they agreed to take on.