Student Loan Forgiveness Temporarily Expanded

Andrew Donaldson

Born and raised in West Virginia, Andrew has since lived and traveled around the world several times over. Though frequently writing about politics out of a sense of duty and love of country, most of the time he would prefer discussions on history, culture, occasionally nerding on aviation, and his amateur foodie tendencies. He can usually be found misspelling/misusing words on Twitter @four4thefire and his writing website Yonder and Home. Andrew is the host of Heard Tell podcast.

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5 Responses

  1. Oscar Gordon

    Good, but given the history of this program across administrations, I’ll not be giving up breathing waiting for actual students to have actual loans forgiven.Report

  2. Brandon Berg

    I’m not sure whether this program is stupid, or an diabolical way to save on labor costs.

    One the one hand, why should total compensation be contingent on how much student loan debt you have? That doesn’t make any sense.

    On the other hand, suppose you have a recent law-school graduate who wants to become a public defender. Having $200,000 in loans from law school, which is hard to service on a public defender’s income, he goes into corporate law to pay them off quickly, intending to quit after a few years. By the time his loans are paid off, he’s become accustomed to private-sector money and decides not to be come a public defender after all.

    But if the government offers to pay his loans off if he works as a public defender for ten years, he might decide after five that he wants to start making private-sector money, but due to the sunk costs feel obligated to stick it out for the full ten years and get his loans forgiven, even if he could pay them off faster by going into industry.

    This is less of an issue with undergraduate debt, because it typically only costs $3,000-5,000 per year to service. But often people value fringe benefits far out of proportion to their actual monetary value. I see this a lot with health insurance, where young people with no dependents will say they’d like to quit their jobs but can’t because they need health insurance. You can buy health insurance! It only costs a few thousand dollars a year for a single adult under 40! If you can’t afford to buy health insurance, how are you going to pay rent and buy food without a paycheck? It’s not implausible to me that there are people who will sacrifice $10,000 per year in cash income for $4,000 per year in student loan forgiveness.

    Plus you know that for whatever reason, a substantial percentage are going to miss at least one of the 120 payments or otherwise make a trivial mistake that resets the clock, , significantly reducing the cost of the program.Report

  3. InMD

    There was a segment about this on 60 minutes last week. Apparently significant numbers of people have been denied forgiveness over bureaucratic incompetence and other incredibly trivial program compliance issues, which may have not actually happened.

    PS I swear I am not so old I am intentionally watching 60 minutes. I left the TV on after whatever the late CBS game was last week, put my son to bed, and it was still on when I came back downstairs to wait for SNF to start. My pants are not up to my armpits and no one has been told to get off my lawn!Report

    • Damon in reply to InMD

      60 Minutes has had some document “lies” they’ve published, but the tone of this article, which I chanced up, sounds reasonable. Never underestimate bureaucratic fuck ups and the ability of interested parties (ie the loan servicers or the ones loaning the money, to hinder as best they can taking any losses.Report

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