From the New York Times: Biden to Cancel $10,000 in Student Loan Debt for Borrowers Earning Less Than $125,000

Jaybird

Jaybird is Birdmojo on Xbox Live and Jaybirdmojo on Playstation's network. He's been playing consoles since the Atari 2600 and it was Zork that taught him how to touch-type. If you've got a song for Wednesday, a commercial for Saturday, a recommendation for Tuesday, an essay for Monday, or, heck, just a handful a questions, fire off an email to AskJaybird-at-gmail.com

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174 Responses

  1. Brandon Berg
    Ignored
    says:

    Just straight-up buying votes. Let’s go me.

    Worth noting that this is on top of the 15+% of debt being forgiven by pausing interest accrual while inflating it away.Report

    • Jaybird in reply to Brandon Berg
      Ignored
      says:

      Gotta admit: I am unclear as to how many votes this will actually purchase.

      Will it get people to switch from Republican to Democrat?
      Will it get people to switch from Third-Party to Democrat?
      Will it get people to switch from Not Voting to Democrat?

      I’m not seeing the needle move a whole lot for any one of those three questions.

      It seems closer to a “I told you if you voted for me, I’d forgive college debt! Here you go!” campaign promise fulfilled than a bribe for future votes.

      But maybe I’m not thinking about it correctly.Report

      • Brandon Berg in reply to Jaybird
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        says:

        The concern is that a frustrated sense of entitlement would lead would-be Democratic voters to sit out the election or vote third party. The people who reluctantly voted for Biden even though they really wanted Sanders. The hope is that bribing them with big ol’ fistfuls of money will make them see Biden in a more positive light.Report

        • Brandon Berg in reply to Brandon Berg
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          says:

          Well, Biden and Democrats more generally, this being a midterm year. This raises an interesting question: Is Biden doing this now, as opposed to a year or 18 months ago, so that the goodwill lasts until the midterm election? I’d love to see the internal communications on this. Maybe they’ll get subpoenaed in the inevitable lawsuit, although presumably they would have been smart enough not to put the really damning stuff in writing.Report

          • Jaybird in reply to Brandon Berg
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            says:

            There is nothing wrong with waiting to forgive student debt until right before an election.

            The main thing that I’d point out is that 3 months from now is a damn eternity and “what have you done for me LATELY” is likely to have kicked in well after any “August Surprise” has been dropped.Report

            • Chip Daniels in reply to Jaybird
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              says:

              The sooner the right stops whining about it the sooner it can be forgotten.

              Unfortunately for them, they are still whining about Robert Bork.

              So I expect that in November we will still be seeing those Tweets of some Republican sputtering in rage over forgiven debt, split screen with their PPP statement of forgiven debt.

              And by November, I mean November 2024.

              (I mean, c’mon there are people on this very blog still chewing on Her Emails)Report

              • Jaybird in reply to Chip Daniels
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                says:

                To be honest, I think that people who have seniors in high school right now will be whining about it shortly.

                “We already had a debt jubilee!”, you can say.Report

              • Chip Daniels in reply to Jaybird
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                says:

                Even better, as people continue to be reminded that free education was a reality for shouty red faced Uncle MAGA and Junior starts asking pointed questions about why.Report

              • Jaybird in reply to Chip Daniels
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                says:

                “Because we lived in stone cinderblock dorms and didn’t have DEI consultants and the food sucked.”

                “The food still sucks.”

                “Are the rooms nicer?”

                “Same ones.”

                “No idea why it’s so much more expensive now, I guess.”

                “RACISM!”Report

              • Chip Daniels in reply to Jaybird
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                says:

                If you don’t even believe that, what makes you think anyone else will?Report

              • Jaybird in reply to Chip Daniels
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                says:

                Because they’re less likely to be proficient in math and reading than my college graduating class was.Report

              • Dark Matter in reply to Chip Daniels
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                says:

                Serious question: How do we control costs if it’s “free”?

                (Previously addressed to the wrong person).Report

              • Chip Daniels in reply to Dark Matter
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                says:

                The street in front of your house is free to you, as is the policeman who patrols it and the streesweeper who cleans it.

                How do we control their cost?

                The University of California operated for almost 100 years tuition free.

                Ironically, administrative costs skyrocketed only after they started charging.Report

              • Dark Matter in reply to Chip Daniels
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                says:

                Unlike streets, we are already having serious problems controlling University costs. Mostly this is because streets haven’t gotten administratively bloated.

                Ironically, administrative costs skyrocketed only after they started charging.

                The time line works better for them capturing subsidies. Making it “free” means… more subsidies? Cost controls?

                If the plan is to fire MANY administrators, then that would at least be a plan. However as far as I can tell no one is even trying to do anything about cost other than throw money at the students.Report

              • Chip Daniels in reply to Dark Matter
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                says:

                I’ve been following this subject since the Obama years and have yet to hear a good explanation for why college costs has exploded far above normal inflation rates.

                No can seem to explain it without shoehorning it into a larger socialism/capitalism ideology.

                But neither one can explain the facts.
                For instance, the administrative costs seem to be universal- public vs private doesn’t seem to matter much.

                If universities are reading market signals to capture cheap subsidy money, how does this explain government run colleges where the price is set by bureaucrats, supposedly immune to such things?

                And back in the postwar post Sputnik college building frenzy, why were colleges so much leaner, when the political winds favored unlimited spending?

                Something has changed across the board, in every state, at colleges of every type.Report

              • Jaybird in reply to Chip Daniels
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                says:

                I’ve been following this subject since the Obama years and have yet to hear a good explanation for why college costs has exploded far above normal inflation rates.

                It’s “cost disease”.

                If you started giving subsidies to Ford, for example, for making Electric Vehicles, you’d find that the prices of the vehicles would very quickly go up to match (or exceed) the subsidies.

                The more grants, the more scholarships, and the more loans that colleges got, the more money they started soaking up.

                It doesn’t matter if they have an endowment the size of the moon, the price went up.

                On top of that, there’s the whole issue of how a degree signals (or used to signal) to an employer “HEY EMPLOY THIS JERK!” and the jerk would make a lot more money over the jerk’s lifetime.

                Colleges said “why shouldn’t we get a piece of that too?” and started charging more and more.

                The more flush with cash they were, it didn’t matter. They had people fighting to get in and, thanks to the “EVERYBODY NEEDS TO GO TO COLLEGE” messaging, kids who would have been just fine with a high school diploma in the 80’s are getting degrees despite not being proficient in reading or math. So even the “schools of last resort” out there have no shortage of kids applying. Heck, give them a degree in something that would have been a punchline back in the 80’s.

                And this has happened across the board, in every state, at colleges of every type.Report

              • Chip Daniels in reply to Jaybird
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                says:

                The more grants, the more scholarships, and the more loans that colleges got, the more money they started soaking up.

                Cool theory, but doesn’t explain the facts.

                Why do government bureaucrats who are tasked with setting prices, suddenly decide to raise prices? Its not like they have a profit motive.

                What prevents the state board of regents from lowering administrative salaries and cutting positions? It can’t be market signals, so what explains their actions?

                And the implied cure- cutting off their supply of money- doesn’t seem plausible either. We can see with empirical evidence that when faced with a budget shortfall, the administrators prefer to cut program rather than overhead.

                I’m just not seeing any explanation for why the people who run colleges seem so fanatically devoted to expanding administrative functions.Report

              • Jaybird in reply to Chip Daniels
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                says:

                Do you want evidence of this sort of thing happening in real life?

                Or do you want to know why this sort of thing happens in real life because just because it happens with other industries doesn’t mean that it should happen for universities and so the fact that it happens to universities just like it happens to other industries is confusing?Report

              • Chip Daniels in reply to Jaybird
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                says:

                I would like an explanation of why the board of regents in virtually every state have consistently made the decisions they do.

                Like, has anyone ever asked them about this, why they don’t use their unaccountable government power to dictate lower salaries and fewer administrators?

                I would love to see an answer to something like that.Report

              • Jaybird in reply to Chip Daniels
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                says:

                I can’t speak on behalf of the board of regents but if they act pretty identically to most other industries, perhaps the answer is that they’re doing the same thing that other industries are doing for similar reasons.

                The belief that they are different and therefore should act differently is the belief that needs to be interrogated, I think.Report

              • Dark Matter in reply to Chip Daniels
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                says:

                Why do government bureaucrats who are tasked with setting prices, suddenly decide to raise prices? Its not like they have a profit motive.

                If a gov bureaucrat wants to empire build by hiring more people who answer to him, what stops him?

                This is a thing in large companies everywhere even when they have profit motive. In private industry upper upper management, who is connected to the bottom line as a whole, will crack down on middle management (or just upper management). In the U, they could raise prices so they did.

                What prevents the state board of regents from lowering administrative salaries and cutting positions?

                Cost cutting is very painful and mostly doesn’t happen unless the company will go under without it. You also have the added impact of politics.

                There are entire departments whose only real job is to virtue signal. The state board of regents can’t get rid of them without protests and ugliness in the news, so they don’t.Report

              • Chip Daniels in reply to Dark Matter
                Ignored
                says:

                Both you and Jaybird are saying the same thing as Paul Campos over at LGM, that all the directors of higher ed across America decided to “run college like a business” and behave like private sector corporate actors.
                https://www.lawyersgunsmoneyblog.com/2022/08/americas-higher-ed-funding-mess

                That is, it wasn’t some structural change that forced them to make different decisions, it was a shift in their attitudes towards their mission and purpose. They stopped thinking of college as a nonprofit public service, and started thinking in terms of revenue and profit maximization.

                Maybe this is true!

                But doesn’t it seem weird, and worth investigating how and why this happened?

                And if this is true, it then it suggests that controlling the cost of higher education is less about subsidies and loans, and more about changing the cultural attitude towards the mission and purpose.Report

              • Dark Matter in reply to Chip Daniels
                Ignored
                says:

                But doesn’t it seem weird, and worth investigating how and why this happened?

                Pournelle’s iron law of bureaucracy seems to cover it pretty well.

                From the point of view of the college, this increase in cost/mission was a good thing. They get more influence, the individuals who make it up individually get more power and so on. They don’t want to transform themselves into community colleges.

                it suggests that controlling the cost of higher education is less about subsidies and loans, and more about changing the cultural attitude towards the mission and purpose.

                “Shifting Culture” is one of the hardest things to do. If you figure out how to do that I have a long list of other problems to solve.

                Think about what it would take to convince the University to fire half of all of it’s bureaucrats.

                Would you be ok with a U firing everyone with “equality”, “social justice”, “outreach”, and/or “minority” in their titles? All of them could probably be let go without affecting math, english, and so on.Report

              • Chip Daniels in reply to Dark Matter
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                says:

                I would absolutely be ok with that.

                The teaching of history of racism is best taught by a history professor not a DEI administrator.Report

              • PD Shaw in reply to Dark Matter
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                says:

                Obama had a plan for cost-control, it was a major initiative highlighted in his 2012 state of the union address, but he got blocked by colleges opposed to the government informing students on the returns on their investment.

                So what we got was a decline in college enrollment as marginal students (those for whom college is a close call and Democrats worry are from a disadvantaged background who would benefit from higher education) got scared off the college track. I have a neighbor has been a professor at two colleges in the last ten years that folded. The invisible hand at work.Report

              • Michael Cain in reply to Chip Daniels
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                says:

                The University of California operated for almost 100 years tuition free.

                Not the only reasons, but…

                In the mid-1960s we decided that we would pay for health care for the poor and the states would bear a considerable part of that expense.

                Starting before the 1990s, but really beginning to bite then, we decided that we would pay a large part of K-12 education out of states’ general funds rather than by local property taxes.

                Today, for the typical state, more than 50% of general fund spending is on Medicaid and K-12 education.

                There is a rather hard political limit of 9-12% on combined state and local taxes.

                State funding of public higher ed is, eventually, doomed.Report

              • Chip Daniels in reply to Michael Cain
                Ignored
                says:

                Starting before the 1990s, but really beginning to bite then, we decided that we would pay a large part of K-12 education out of states’ general funds rather than by local property taxes.

                Yeah. I wonder what happened to cause that…My spidey sense is telling me it may have been something in 1978, something to do with property taxes.Report

              • Michael Cain in reply to Chip Daniels
                Ignored
                says:

                Ah, to have the academic credentials to publish and the minionsgrad students to do the drudge work.

                Essentially all of the states faced the same problem. They had promised the oldsters that they could stay in their paid-for homes forever on their SS and pensions. That turned out to not be true — all of the states found that providing the services they wanted to using property tax revenues meant taxing the oldsters out.

                California’s solution to the problem was California’s. Colorado’s solution to the problem was Colorado’s. Everyone’s solution was different. All of the solutions meant that local property taxes didn’t generate enough revenue, and the burden was shifted to the state.Report

              • Dark Matter in reply to Jaybird
                Ignored
                says:

                Serious question: How do we control costs if it’s “free”?Report

              • Jaybird in reply to Dark Matter
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                says:

                Probably by lowering quality.Report

  2. Damon
    Ignored
    says:

    “The administration will contend that 90 percent of the relief will go to households earning $75,000 a year or less.” Well, then why not make 80K the cap?Report

  3. Jaybird
    Ignored
    says:

    If I have a complaint, it’s that this does nothing to address the root problem.

    The root problem is that there are a bunch of people purchasing a product that is not worth the price.

    Saying “oh, we’ll have other people pay some of the price for you” will do nothing to address the root of the problem.

    Arguments that this will make the root of the problem worse are arguments that make sense to me.

    “Oh, there’s a subsidy of $X? We can raise our prices by $X!” kinda stuff.Report

  4. Saul Degraw
    Ignored
    says:

    There is more to this than the debt relief: https://studentaid.gov/debt-relief-announcement/

    Here is my three part take of student debt relief:

    1. There is utilitarian number that can help a overwhelmingly majority of people with student debt relief;

    2. This number will not help the loudest voices on student debt relief who will continue to be displeased because nothing more than a complete debt relief followed by a perpetual MacArthur grant will make them happy and even then….

    3. Group 2 is loud but does not move many marginal votes.

    All in all, I think this helps Democrats in November and is good policy. The real help for Democrats is that Americans really hate Dobbs and are starting to connect the dots and see the Republicans as a lot of anti-abortion extremists.Report

    • Chip Daniels in reply to Saul Degraw
      Ignored
      says:

      I’m fairly ambivalent about it as policy since I think the main driver of higher ed costs isn’t being addressed.
      On the other hand, it won’t cause much harm.

      But as politics, its pretty good. Like abortion, college debt held by lower income people is very real and tangible, not some abstract things only us political types talk about.Report

      • Dark Matter in reply to Chip Daniels
        Ignored
        says:

        On the whole, college is an upper class thing thus college debt is an upper class thing, while paying taxes is not.

        So on the whole, we’re asking the poor to subsidize the well off for a competitive advantage.Report

        • Chip Daniels in reply to Dark Matter
          Ignored
          says:

          No, a lot of debtors for college loans are lower income people who attended vocational schools for technical job training.Report

          • Pinky in reply to Chip Daniels
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            says:

            It’s been a while since we’ve been over this, but if I recall correctly we found lower income (possibly took some classes but didn’t graduate), delayed upper income (law school and medicine), and upper class advanced degrees without great prospects.Report

          • Dark Matter in reply to Chip Daniels
            Ignored
            says:

            Looking at the data… I think my statement was accurate. A lot of these numbers are focused on “total debt” rather than “median per person in that income bracket” so it’s hard.

            But only 62% of people go to college at all and that massively swings towards the upper classes. So the 38% of people who never went to college are college-debt free and we’re taxing them to pay for this. Yes, some of the 62% are going to from the lower classes but near all of the 38% will be.

            The lowest income quartile (25th percentile and lower) owe 12% of all student loan debt.

            So 88% of all student loan debt is from the upper 75% in income.

            https://educationdata.org/student-loan-debt-by-income-levelReport

            • Chip Daniels in reply to Dark Matter
              Ignored
              says:

              Yes exactly. This program targets that very 12% held by the lower incomes.
              The amounts of their debt are lower. But so are their incomes.

              A person who went to a technical school trying to pay off $3,000 of debt on a $30,000 income is different than a Ivy grad trying to pay off $10,000 debt on a $100,000 income.

              So this program is means tested to targets that very 12%..Report

            • cam in reply to Dark Matter
              Ignored
              says:

              This strikes me as weird way to parse this data. ‘upper 75% of income’

              I’m seeing that 36% of student loan debt is held by people making below median income. That strikes me as a lot of people who will see a real boost from this, especially as it goes to principle. These are working and middle class people like teachers, nurses, social workers, managers at box stores, etc. Add in the next tier (the only other group who would qualify) and you get people holding 65% of student load debt, which are from the *lower* 75% of income.

              Also ‘So the 38% of people who never went to college are college-debt free and we’re taxing them to pay for this’ is a silly argument. The vast majority of the country will never see a farm subsidy check. Should we eliminate those because the vast majority who do not get them are taxed to pay for this? And let’s not get into all the tax breaks for billionaires…Report

            • Jaybird in reply to Dark Matter
              Ignored
              says:

              Yeah, I’d like to see this done by quartiles or quintiles.

              If 92% of all the debt is in the lower half, and 12% of the debt is in the bottom quarter, then 80% of the debt is in the 2nd quartile.

              THIS STRIKES ME AS GOOD!

              If, however, 44% of all the debt is in the lower half and 12% of the debt is in the bottom quarter, we’re talking about a program that, instead, helps the top half more.

              Which… well, it’s also not bad. Maybe there’s space to run on “How much money have we spent on the bottom half of society? Maybe we should shake it up a little to the people who actually produce stuff!”

              But we have to look at the numbers…

              Okay, this is in your link, even.

              The 51st to 75th percentile has incomes from $65,037 – $121,318.

              Personally, I think that if we were going to have a cutoff point, having it at exactly $121,318 would have been a perfect place to have it.

              But that’s kinda nitpicky. $125k is a round number and I can see why that would appeal to people who think about numbers differently.

              So we could say that the program targets the bottom 75% in income overwhelmingly with only token support to the top quartile. (This is why I’d want the cutoff where I wanted it. We could say “IT DOESN’T EVEN *TOUCH* THE TOP QUARTILE, DINGUS!”)

              Now does it disproportionately help people who have a leg up compared to others? Yeah, probably.

              Does it not even touch the root cause? Nope. Doesn’t even come *CLOSE*.

              Is it going to make things worse? Yeah, probably.

              But this particular program seems to benefit the bottom 75% in income.

              For once.Report

              • Dark Matter in reply to Jaybird
                Ignored
                says:

                Now does it disproportionately help people who have a leg up compared to others? Yeah, probably. Does it not even touch the root cause? Nope. Doesn’t even come *CLOSE*. Is it going to make things worse? Yeah, probably.

                At this point I lose any sympathy for the “but” after that.

                Especially not when you have a link of Ford raising their prices to capture their subsidy. Colleges won’t do that?

                This is broken windows economics. It’s also enabling dysfunctional behavior and setting a bad president on how we’re supposed to “deal” with this problem.

                Long term we’re giving money to the people creating the problem(s). Where those people are corporations, they’re giving money to politicians to urge them to not fix the problem(s). Where those people are individuals we’re rewarding bad choices.Report

              • Jaybird in reply to Dark Matter
                Ignored
                says:

                It’s old-fashioned patronage.

                How I’ve missed it!Report

              • PD Shaw in reply to Jaybird
                Ignored
                says:

                Share of student loan debt by household income (ages 25-40):

                1st: 9.4%
                2nd: 16.4%
                3rd: 18.2%
                4th: 27.5%
                5th: 28.5%

                https://www.peoplespolicyproject.org/2020/11/16/what-is-the-current-student-debt-situation/

                (The average income for the top 5th quintile is $253,484, so debt cancelation would include a significant chuck of them)

                If Republicans passed a tax break with these distributional effects, would it be trickle-down?Report

              • InMD in reply to PD Shaw
                Ignored
                says:

                Do you even have to ask?Report

              • Jaybird in reply to PD Shaw
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                says:

                I don’t want to get into the distinctions between “not giving money to the government” and “getting money from the government” and talking about how, from some perspectives, they are different things even as I recognize that there are people for whom they are the exact same thing.

                So I’ll just say that if this is a policy that will make things worse in the medium term and helps poor people, hey. Sometimes you help poor people.

                If it is, instead, a policy that will make things worse in the medium term and primarily helps rich people?

                Well, I suppose it’s good that Biden figured out how to disguise it and sell it as “hey, we’re helping the poor!” and obscure that it helps the rich more.

                Good for him.Report

              • PD Shaw in reply to Jaybird
                Ignored
                says:

                I don’t see how this is disguised. Anybody without a college degree understands who it is that goes to college.

                As to spending for college, if your household is in the bottom half of income in Illinois, you are entitled to free tuition at U of I and probably all other state schools. If you want to borrow more than the $32,000 or so in federal direct loans, then as far I can tell you and/or your parents need to pass a credit check. IOW, the lower the income the more the financial aid and the less the eligibility for student loans.Report

        • Brandon Berg in reply to Dark Matter
          Ignored
          says:

          Paying net positive taxes is definitely an upper class thing. Poor people pay money to the government, but not nearly enough to pay for the services they consume. It’s hard to calculate the exact point where the government breaks even on you, but given that people graduate from high school $200k in the hole, you need to pay several thousand dollars per year in taxes just for the government to break even on putting you through school. Then you have to prepay for Social Security and Medicare, pay the government back for any means-tested benefits, and that’s without getting into things like infrastructure and public goods.

          Since the federal government runs deficits, we know that it doesn’t break even on the average citizen. And since government spending is distributed far more evenly than tax liabilities, it’s clear that the government doesn’t break even on the median citizen, either. This is a bit of a SWAG, but I suspect that the top quintile of lifetime earners is subsidizing all the others.

          Furthermore, while federal taxes on the top decile have gone up and down for forty years, federal taxes on them lower quintiles have only gone down. Tax increases on the poor are not on the table, politically. This will be the even richer subsidizing the rich, not the poor subsidizing the rich. The poor may suffer as a result, bit it will be through inflation and reduced growth in real aggregate supply, not through higher taxes.Report

          • Chip Daniels in reply to Brandon Berg
            Ignored
            says:

            What middle class and rich people “consume” is the social, legal, and physical infrastructure that government spending creates.

            I make a comfortable living in part due to my own achievements but also because the government has created a rich environment of educated workers and affluent consumers on which my job depends.Report

  5. Dark Matter
    Ignored
    says:

    The actual solution is to make school debt dischargeable in bankruptcy. There are other solutions but that’s by far the easiest.

    This is encouraging students to get loans they can’t afford and encouraging colleges to raise prices.Report

  6. Jaybird
    Ignored
    says:

    Those of you idly wondering about “constitutionality”, as if that mattered, have an answer:

    Report

    • Dark Matter in reply to Jaybird
      Ignored
      says:

      What he means is “My numbers are down and this will help me get re-elected”.

      And that pulls into play the entire question of whether or not it’s legal and/or Constitutional. I.e. he may be in the position of needing to reinstate those loans later.Report

  7. Jaybird
    Ignored
    says:

    Reddit has a lot more details about particulars.

    (If you want to avoid bad vibes, don’t sort by controversial.)Report

  8. Jaybird
    Ignored
    says:

    This may appear that I’m trying to change the subject but, seriously, I’m not.

    This is a headline from the week after the gummint announced a $7500 tax rebate for buying an electric vehicle:
    Ford raises price of electric F-150 Lightning by up to $8,500 due to ‘significant’ battery cost increases.Report

    • Damon in reply to Jaybird
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      says:

      Few were ever going to get the rebate because the ingredients of the battery are not found here, and they are all made over seas. But it’s to encourage “domestic” production” of batteries. Right….Report

  9. Jaybird
    Ignored
    says:

    Here’s a question that I don’t have answered:

    “Do I have to do anything?”

    Like, let’s say that my household owes the federal government $25,000 and we make less than $250,000. Let’s say that, heck, I got a Pell Grant too.

    So I am, in theory, entitled to $20,000 in debt relief.

    Do I have to do anything? Is this something that I have to apply for? Is there a form I have to fill out?

    Or does the ledger just compare my earnings in 2021 and 2020 against the $250,000 yardstick, see that I owe $25,000, and then knock it down to $5,000?Report

    • Kazzy in reply to Jaybird
      Ignored
      says:

      It depends: https://www.nytimes.com/2022/08/24/business/biden-student-loan-forgiveness.html

      What’s the first thing I need to do if I qualify?
      Start by making sure that your loan servicer knows how to find you, so that you’ll be able to receive any guidance it provides and follow any instructions that it issues. Check that your postal address, your email address and your mobile phone number are listed accurately.

      If you don’t know who your servicer is, consult the Department of Education’s “Who is my loan servicer?” web page for instructions.

      Will the $10,000 in cancellation happen automatically, or do I need to submit a tax return or do something else to prove that I qualify?
      It depends. If you’re already enrolled in some kind of income-driven repayment plan and have submitted your most recent tax return to certify that income, your servicer and the Education Department know how much you earn and you should not need to do anything else. Still, keep an eye out for guidance from your servicer.

      The department said Wednesday that close to eight million borrowers “may” be eligible to get this automatic relief.

      For everyone else, it will make some kind of application available by the end of the year. “The Department of Education will work quickly and efficiently to set up a simple application process for borrowers to claim relief,” according to a White House statement.Report

      • Jaybird in reply to Kazzy
        Ignored
        says:

        Okay. Let me see if I can coalesce my thoughts on this.

        The other day we talked about the discrepancy between graduation and proficiency, right? A school might have a graduation rate of 90% (YAY!) and a proficiency rate of 75% (15%!) and that’s practically normal.

        Okay. Out of these 15%, how many of them are likely to be the “some college” in the people who go on to go to college but not complete it?

        Like, the ones who take on debt, go to school, and for whatever reason, not complete the next two years. Hey, it happens.

        From what I understand, “some college” holds the lion’s share of debt that ain’t never gonna get paid off… and, as such, requires the most debt relief assistance.

        It strikes me as exceptionally likely that if the relief is not automatic (that is: you don’t have to do *ANYTHING*… like, not even google something and check into a webpage and check a box), these people will be the least likely to receive the assistance.

        Right?Report

  10. Saul Degraw
    Ignored
    says:

    Jezebel provides a perfect variant of what I predicted would happen above. This is a good parody but it is real: https://jezebel.com/a-drop-in-the-bucket-for-many-let-s-put-biden-s-stud-1849450407Report

    • InMD in reply to Saul Degraw
      Ignored
      says:

      Wait was the supposed to be serious or not?Report

      • LeeEsq in reply to InMD
        Ignored
        says:

        Real, oh so very real.Report

      • Jaybird in reply to InMD
        Ignored
        says:

        Part of the problem is that there is a somewhat small contingent of people who have a *LOT* of college debt but also have a *LOT* of outsized influence.

        Journalism majors.Report

        • InMD in reply to Jaybird
          Ignored
          says:

          Oh I get it. I’m very much of the ‘law school scam’ cohort of JDs. I even sympathize in certain ways since I know and know of a lot of people in that boat where the value proposition has not really panned out. At risk of my own credibility I can absolutely say it sucks! You work your ass off for what everyone tells you is the right thing, defer gratification while your friends are partying, then find yourself no better off or maybe net worse. My own trajectory has been pretty atypical and had I not gotten the big break I did a few years out it could very well be me.

          But it’s still critical to have perspective on those frustrations, and it’s disappointing when you see so little.Report

    • Dark Matter in reply to Saul Degraw
      Ignored
      says:

      From your link: Many graduates and individuals with advanced degrees end up working in advocacy, either for nonprofits or the public sector.

      Time after time Congress mistakes subsidizing the trappings of the middle/upper class with getting people to join the middle/upper class.

      All degrees are not equal in terms of getting your money back nor increasing income. For that matter I doubt that all degrees have positive investment return.Report

      • Dark Matter in reply to Dark Matter
        Ignored
        says:

        Time after time Congress mistakes subsidizing the trappings of the middle/upper class with getting people to join the middle/upper class. All degrees are not equal in terms of getting your money back nor increasing income.

        Wonderful example of that.

        I was not comfortable advising my children to achieve the highest level of education when I myself didn’t… I began a doctoral degree program in human resources management.

        OK, so she’s going for a PhD in HR management. With four kids, none of whom had started college. She got her degree, it took 6 years (pretty normal, despite U’s saying it will only take 3). She wanted to research “the effects of slavery and globalization”, because that’s a thing in HR management.

        And after having done that, she’s found that having a PhD in her field doesn’t increase her earnings enough to pay for what she did so she doesn’t want to pay back her loans.

        She never had a workable plan for how to pay back the loans, never had realistic expectations, and society shouldn’t be underwriting her. If Biden did somehow reduce how much of a trainwreck her plans were on her, then the obvious solution by the banks is to refuse to give her loans because she doesn’t have the means to service them.

        If that’s going to happen then Biden did a really good thing. However my expectation is that doesn’t happen, that the banks will loan her and it’s the American Tax payers who don’t get their money back. So we’re going to enable people to make bad choices. And yes, this was a really bad choice since she could have been sending her kids to college.

        https://www.theguardian.com/commentisfree/2022/aug/25/student-debt-strike-biden-older-peopleReport

  11. Kazzy
    Ignored
    says:

    Sitting in downtown Manhattan bar waiting for friends… younger crowd… everyone talking forgiveness… busier than usual. Coincidence?Report

    • Chip Daniels in reply to Kazzy
      Ignored
      says:

      Keep a clean nose watch the plain clothes
      Don’t need a weatherman to know which way the wind blows…Report

    • Jaybird in reply to Kazzy
      Ignored
      says:

      WHY ARE YOU IN A CROWDED BAR DURING COVID?!?

      Wait, wrong thread.

      I’m not sure it’s *THAT* meaningful. The ones who hear the news and say “AWESOME! LET’S GO OUT TO EAT!” are the ones who will be going out to eat.

      Survivorship bias. That’s what I’m saying is going on here.Report

  12. LeeEsq
    Ignored
    says:

    I’ll just leave this here to show popular this is:

    Report

    • Jaybird in reply to LeeEsq
      Ignored
      says:

      That’s as big a pop as I’ve heard.

      (The only thing that might have me worry a hair is the whole over-promise/under-deliver thing. But maybe the audience knows that it’s $10K, $20K if you got a Pell Grant.)Report

    • Dark Matter in reply to LeeEsq
      Ignored
      says:

      One of the sub posts claimed there was more “reform” in what Biden did than I’d heard.

      Biden isn’t just forgiving a set amount of debt. He is also enacting a new policy that ends excess interest on student loans—as long as a borrower pays their minimum monthly payment (now capped at only 5% of their income), their balance will no longer increase.

      Anyone know if this is right? And how can the President just do this, it seems like Congress’ job.Report

      • Kazzy in reply to Dark Matter
        Ignored
        says:

        From what analysis I’ve seen, the forgiveness is getting all the headlines but the reform is going to be much more impactful.

        From the Reddit link Jay shared:
        “Proposes a new income-based repayment plan which caps payments at 5% of discretionary income (down from the current 10%).

        New IBR plan also raises amount of income that is considered non-discretionary to 225% of poverty level (up from current 150%); this means if you earn under 225% of poverty level (about $30,577/year or $15/hour for a family of 1), your monthly payment would be $0.

        New IBR plan covers monthly interest so long as payments are made on time, meaning the loan would not grow due to interest even if the payment is $0.

        New IBR plan forgives loans of $12,000 or less (original loan, not current balance) after 10 years instead of 20.”

        No idea of the “how” but that seems to be the “what”.Report

        • Dark Matter in reply to Kazzy
          Ignored
          says:

          The big question is who is eating the cost if the person can’t/won’t/doesn’t pay?

          If it’s the banks, then we should instantly expect them to refuse to fund obviously bad ideas and there will be much squeaking about inequality.

          If it’s the taxpayers, then we’re in third party pays territory and colleges will raise their rates to capture our generosity.Report

          • Kazzy in reply to Dark Matter
            Ignored
            says:

            I think there are (at least) three angles from which to look at this:
            1.) What does this do for those in student debt? It seems like the total package — reform + forgiveness — can be pretty impactful for these folks. MAYBE not as impactful as some had hoped for but it seems to be an undeniable good thing for them.
            2.) What does this do for the student loan system going forward? I haven’t seen much on this, which makes me think it doesn’t do much.
            3.) What does this do for the country as a whole? Remains to be seen, in part because of questions like what you ask here.

            I’d really like to see more attention paid to #2, which isn’t exactly a unique perspective.Report

          • Brandon Berg in reply to Dark Matter
            Ignored
            says:

            Taxpayers take the loss. The federal government holds something like 90% of all student loan debt, and the cancellation doesn’t apply to private debt anyway. We actually already lose a ton of money on undergrad loans due to the existing IBR system, though grad school loans are profitable.Report

  13. Marchmaine
    Ignored
    says:

    There’s rarely a political price to be paid for giving people money… so probably a smart move politically? Most likely?

    Sure, I could see vectors where smart framing could yield some opposition votes, but I kinda think it will be less salient in the long run because other people getting things – even if felt to be unfair – doesn’t hit like losing something you’re getting… might be salient in specific districts, though.

    And, bracketing the dubious authority appropriated by the Executive branch – part of the long trend on the left of their flirting with “common good authoritarianism” (wink) – this is such unserious Policy Making that after thinking long and hard at how to break down how bad it is, I can only come up with: Cringe.

    Simply put (and as I’ve put it simply before) any loan discharges has to at the end of a comprehensive reworking of the entire premise of Student Loans and Education. That’s it. Doing this first without doing the hard work of spreading the risk back to schools and lenders based on outcomes and expected outcomes? By whatever preferred policy methods your faction thinks best? If you don’t do the first part first, your give-away is, well, cringe.Report

    • InMD in reply to Marchmaine
      Ignored
      says:

      I think there is a better than 50/50 chance that the federal courts have the final word on most of this. So from a politics standpoint even if it’s stymied it’s a win/no lose for the administration, cynical as the policy is on the merits.Report

      • Marchmaine in reply to InMD
        Ignored
        says:

        Yes, the fig leaf seems very small; not sure what that says about the EO though.Report

      • Kenb in reply to InMD
        Ignored
        says:

        I see some knowledgeable people saying that even though this pretty obviously doesn’t hold up on the merits, there may be no one with the standing to bring the suit.Report

        • InMD in reply to Kenb
          Ignored
          says:

          That is certainly one way it could be resolved.Report

          • Marchmaine in reply to InMD
            Ignored
            says:

            The Roberts Invisible Standing jurisprudence… his legacy.

            I guess this validates the TX Abortion law and CA Gun laws. We’re all just legal shades in purgatory… no standing.Report

            • InMD in reply to Marchmaine
              Ignored
              says:

              Heh maybe. I think the main issue here isn’t that no one could theoretically claim an injury, it’s that the party most obviously ‘losing’ the money is the government, which isn’t going to sue itself for a decision it made.Report

              • Marchmaine in reply to InMD
                Ignored
                says:

                I guess if I just do non-lawyer reasoning… if the issue is that the Exec Branch is exercising it’s powers beyond the scope of congressional laws wouldn’t a single member of congress be enough to challenge?

                Else we have a weird situation where congress can ‘silently’ delegate exec power by not exercising standing? But that would require unanimity, not simple majority no?

                Not that I think this particular matter is a constitutional crisis or anything… just wondering at invisible laws passed by Govt. without standing to make sure they pass constitutional muster.

                Seems like the sorts of loopholes we don’t want to have — like, the idea that we think an illegal Executive action is ok as long as 2/3 of the branches keep quiet? Are we that sure of our “Common Good Authoritarianism” after 2024 elections?Report

              • InMD in reply to Marchmaine
                Ignored
                says:

                Maybe one of our con law experts can jump in but I believe scholars disagree on the question of whether an individual rep or senator could sue the executive branch over an interpretation. It could happen in the sense that anyone in America can attempt to sue for anything but not sure how far it would get. Chances of prevailing seem to me really low but I admit to being out of my area of expertise.

                The natural way for Congress to respond is of course to amend the law to clarify that this is not allowed. But if they don’t
                and if no one else sues or has standing to sue then yea, whatever happened stands. On the larger issues you raise yours is basically the same reaction I had when I read Chevron for the first time in my admin law class.Report

              • Marchmaine in reply to InMD
                Ignored
                says:

                Heh, Chevron is where they beat the non-lawyer out of you.Report

              • InMD in reply to Marchmaine
                Ignored
                says:

                They wish!Report

              • PD Shaw in reply to InMD
                Ignored
                says:

                I’m not that familiar with Congressional standing issues, but another issue might be retroactive / prospective remedies. If the Administration moves quickly to cancel debts, is a Court really going to order reinstatement. If someone with standing quickly seeks a preliminary injunction to stop cancellation, will the courts grant the injunction in light of the balance of the various equities? Don’t know.Report

              • InMD in reply to PD Shaw
                Ignored
                says:

                That’s kind of what I was thinking. Even without getting into the core constitutional issues, unless there was a really speedy injunction, it seems to me as though the moment the debt became forgiven the issue would be moot at least for those amounts that already came off the books.Report

              • Marchmaine in reply to InMD
                Ignored
                says:

                A bit like the War Powers act. The doing of it is the thing… notification is a courtesy.Report

              • PD Shaw in reply to InMD
                Ignored
                says:

                The best standing argument appears to be for the lending institutions servicing these loans who would lose monthly payments they receive while loans are in repayment.Report

        • KenB in reply to Kenb
          Ignored
          says:

          And others saying that the best outcome for Biden would be for the court to strike it down – he gets credit for trying it even though he knows it’s a bad idea, and the people demanding this are angry at the courts instead.Report

    • North in reply to Marchmaine
      Ignored
      says:

      Policy wise it’s at best neutral but most likely mildly harmful. Politically it’s probably a winner though I can’t begin to guess how much. As Saul cogently noted the loudest student debt yappers will keep yapping.

      But I agree that as long as risk isn’t pushed back onto the universities then the universities will simply eat this subsidy, pocket the relief of pressure this gives them and merrily continue their administrative bloat.Report

      • Marchmaine in reply to North
        Ignored
        says:

        Mildly harmful (in my mind) would be *some* uncertainty around future subsidies would merely temper school fees (all costs, not misleading tuition or worse, Net Tuition).

        What’s the level of uncertainty around doing this again?Report

        • Jaybird in reply to Saul Degraw
          Ignored
          says:

          In another “the writer doesn’t write the headlines!” story, you can see how Stiglitz himself frames his own article:

          Report

          • Marchmaine in reply to Jaybird
            Ignored
            says:

            “To start with, the value of the reduced debt repayments is so small that the cancellation’s impact will be negligible.”

            Well, dang… what if we cancel $300B in debt and no can tell the difference.

            Logically, all we did was move their pay-off dates forward, I guess? That’s not nothing, but starting to get a “where’s my $2000 check vibe” in that case.Report

          • Brandon Berg in reply to Jaybird
            Ignored
            says:

            No, Stiglitz very clearly says what the headline says:

            As part of a larger program of cancellation, the Biden administration would end forbearance; the resumption of payments in January is estimated to be worth more than $30 billion annually. These numbers are modest relative to the size of our economy. Still, their net effect will be to reduce inflation.

            He’s pulling a rhetorical swindle by lumping together the cancellation with restarting loan payments. But loan payments were scheduled to restart next week. Biden’s EO not only does not restart loan payments, but extends the interest-free forbearance.

            So Stiglitz claims that the deflationary effect of Biden restarting loan payments counter the inflationary effect of debt cancellation, while in reality the he’s adding to the inflationary effect of cancelling debt by delaying the resumption of payments. Not to mention the inflationary effect of extending forbearance for the past year, despite the lack of any real economic justification.

            It’s sad to see great economists turn into third-rate hacks.Report

        • North in reply to Saul Degraw
          Ignored
          says:

          I read that article and the most he seemed to say is ‘it’d so small in the big scheme of things that it won’t make inflation worse” so how the fish does that translate into reducing inflation? I support Biden’s decision in that he promised he’d do something along these lines, got elected and is keeping his promise but for anyone to claim it’s deflationary is deranged. It is stimulative and is, therefore, inflationary.Report

          • Dark Matter in reply to North
            Ignored
            says:

            We’ll increase spending until inflation goes down.Report

          • Jaybird in reply to North
            Ignored
            says:

            In less than 12 hours, we’ve gone from

            “Actually, cancelling student debt will cut inflation”
            to
            “Cutting student debt will not contribute to inflation”
            to
            “it’d be a very small contributor to inflation”

            The next 12 hours ain’t lookin’ good.Report

          • Michael Drew in reply to North
            Ignored
            says:

            The key point is the payment resumption and the disposable income expectation (therefore spending attitudes) it creates.

            As Jaybird points out we have the common “Tweet/headline/actual article” disconnect in claims… for the clicks… here. (I’m not sure if we’re supposed to think Stiglitz writes his own tweets but I think… he doesn’t.0

            The claim that appears is actually, adding emphasis of my own, “the new student-loan policy may even reduce inflation.”

            I take yesterday’s announcement as a statement of a broad new single “student-loan policy.” One policy made up of many policies. That’s… how policy works, that’s what it is.

            As others have pointed out, there are several significant components to this policy. The income-based repayment changes Kazzy explains are very significant. But from a macroeconomic perspective one aspect of the policy swamps all the others and it’s this: in January for the first time since early Covid *most everyone with student loans will resume making payments of some size after 30 months spent establishing a baseline of having to make no such payments at all*. That’s a change That is a huge subtraction of consumer liquidity from the economy starting the first of the year. Huge in macro and huge as a part of people’s budgets.

            No matter what goodies we find for debtors tucked away in the order, none of it can make that subtractive number go neutral or positive – because all of it is just adjustments to the terms on which nearly everyone who has student loans is going to go from owing zero dollars a month going back to before this inflation was a twinkle in Jerome Powell’s eyes. Not to say this inflation is 100% an effect of Covid, but *all* of the context for it, the creation of conditions that caused it, occurred while these student loan payments were paused. The baseline is entirely what it has been for 30 months… no payments. And now payments are set to start, with forgiveness setting the terms for it. In some cases reducing the new payments to $0… but not in very many cases. And in many cases at the top end, not reducing it at all (even in many cases where the $10,000 is lopped off the principal).

            You could say that Biden… or some president… had to do this eventually, so the baseline shouldn’t be the world of paused student loan payments. It’s… probably true that he had to do it eventually? However if so, why hasn’t there been a successful lawsuit to force him to like there was one to force him to end the eviction moratorium? In any case Biden likely had effective discretion over when to throw the switch on this big money vacuum cleaner he had in his back pocket for at least another year or so.

            But even if Biden having to do it means it shouldn’t be the baseline, that’s more a legal/ethical/responsibility truth than an economic one. Economically, the baseline that’s been established as the context for this inflation just simply is the world of paused loans.

            The $10,000 forgiveness for some debtors is one part of a broad “new student-loan policy” that is matched with several other reforms but most significantly from an inflationary perspective a an action to go from calling due no payments at all from any American student loan debtors for the last two and half years, to returning to calling due essentially the same payments as in 2019 from those with the biggest debt loads, payments adjusted a bit or considerably downward for many (but again, still going from a baseline of nothing to now having to pay something significant out of the same household budget), and eliminating payments for a few. (Which, again, is just a status-quo household budget situation from a student loan perspective from December to January for those households. No one comes out ahead of where they’ve been from a disposable-income-net-student-loan-payment perspective of where they’ve been for the last 30 months from this.)

            One other point: I imagine some are asking… what about September, October, November, and December when presumably a lot of the forgiveness will be happening?

            First of all, policy like this generally just doesn’t operate on that time scale. These changes are meant to define student loan policy for the rest of this administration, at least. If they’re inflationary over 3-6 months, that’s just some of the friction of making federal policy.

            Second, though, I question how much forgiveness will formally occur before the end of the year. Bureaucratic sloth and so forth. (For that matter I don’t even know if any of these forgiveness actions are even authorized to occur before many weeks pass.)

            Third, even if some forgiveness began this month, inflation is an expectations game. Whatever happens, the vast majority of sed debtors have been told their payments are going to go from $0 a month as they have been for years, to some hundred(s) right after the holidays. How would it affect your spending if you were told that between now and Christmas your paycheck would stay what it has been for more than two years, but right after that it’s going to go down $100/check – or $200/check? Would you go on an extraordinarily exuberant back-to-school spending spree that particular fall? Maybe you would (I might), but almost certainly most people wouldn’t.

            But lastly and above all: *for the next four months all student loan payments remain paused, i.e. $0*. Any forgiveness that happens in that doesn’t put a single additional dollar in anyone’s pocket for the rest of the year. No one’s loan payment is becoming negative so they start getting money from this. Everyone stays at zero. Then at the first(ish) of the year, in the best (worst?) cases, some people who would have had student loans going forward now will have none. So their payments will become… $0. Which is what it is now and has been for two and a half years. No one will start to see more money drop into their accounts than they have been seeing for 30 months as a result of this policy. So where can significant inflation come from?

            That’s how Stiglitz can say that “[the new student-loan policy] inflationary impact will be minuscule.”

            And many more people with student debt than those who would have had payments resume but instead will have their loans entirely forgiven, causing their payments to become $0 when they had previously been $0, will see payments resume: they will go from the current universal $0/mo baseline to seeing scores or hundreds of dollars go to the government that had previously been going into their checking account.

            That is how Stiglitz can say that “the new student-loan policy may even reduce inflation.”Report

            • North in reply to Michael Drew
              Ignored
              says:

              This is a fantastic analysis. You should have written the Stiglitz article instead of Stiglitz.Report

              • Michael Drew in reply to North
                Ignored
                says:

                Thanks North!

                Jason Furman is at some pains to argue essentially that ending the pause is essentially not a policy change, and “inflationary” re: cancellation has to be measured from the baseline of what would happen to prices in 2023 & 2024 if payments resumed but there wasn’t cancellation. Which… the cancellations will definitely mitigate the deflationary effect of resuming payments. So compared to that baseline… inflationary.

                But arguing for that baseline seems like moralistic pleading to me. What’s actrgoing to happen from the policy announcements made this week is that a ton of money is going to be diverted from spenders to the government, and we know whether that’s inflationary or deflationary. That’s how I see it anyway.

                https://twitter.com/jasonfurman/status/1562830721252614144?s=21&t=c6Y5OptBxDXovLakGAIQfQReport

              • KenB in reply to Michael Drew
                Ignored
                says:

                Furman seems closer to the mark to me — restarting the payments is expected after an emergency pause (in fact it should have been done quite a while ago absent the political considerations), and if that’s all that were happening here then there wouldn’t be much debate. It’s the actual modifications to the existing program that are being questioned — lumping in the normal resumption with those changes and calling the whole thing Biden’s new policy seems more dishonest to me.Report

            • Jaybird in reply to Michael Drew
              Ignored
              says:

              Third, even if some forgiveness began this month, inflation is an expectations game.

              Lemme point you to a comment just a handful of ones above:

              Sitting in downtown Manhattan bar waiting for friends… younger crowd… everyone talking forgiveness… busier than usual. Coincidence?

              How many of that younger crowd of would have said “let’s spend money at the downtown Manhattan bar on a Wednesday!” if they hadn’t had their loans forgiven?Report

              • Jaybird in reply to Jaybird
                Ignored
                says:

                As for the rest of it, of course it’s going to be inflationary. It may not be *THAT* inflationary, all told, but we are going to have dollars chasing goods and services that, once upon a time, would have merely been sent to the black hole that is the government.

                Will it be a big deal? In some places more than others, sure. In some places it won’t be noticed at all.Report

              • Chip Daniels in reply to Jaybird
                Ignored
                says:

                So…after all this sturm und drang, after all the nervous handwringing and muttering, the conclusion is that this program makes lots of suffering people better off, at the cost of being slightly inflationary, but scarcely noticeable?

                Yes please Republicans, run against this. Run against it hard!Report

              • Jaybird in reply to Chip Daniels
                Ignored
                says:

                Chip, for *MY* part, my criticism of “paying off $10,000 worth of debt” is *NOT* “but it’ll cause inflation!”

                Maybe it’s something like “It’ll cause further inflation of tuition!”

                But, you know, nobody cares about that.

                Certainly not the people applying this particular band-aid.Report

              • Philip H in reply to Jaybird
                Ignored
                says:

                The federal government does not have the legal authority to force sate university systems to lower tuition.Report

              • Jaybird in reply to Philip H
                Ignored
                says:

                Oh, was that the thing that I’ve been arguing?

                Or is that the only possible other option that you can conceive of and, therefore, the only option that you can imagine me holding?Report

              • Philip H in reply to Jaybird
                Ignored
                says:

                If you want to talk about college tuition costs – which you seem to be talking about – you are talking about something controlled by the 50 sates not the federal government under the current system.Report

              • Jaybird in reply to Philip H
                Ignored
                says:

                Golly, it must be really confusing to look at this and say “If Jaybird doesn’t like how loans are paid off, the only other thing he could possibly think would solve the problem is the President talking to each and every single University administrator! We have Zoom, I guess…”

                It must be really confounding.Report

              • Chip Daniels in reply to Jaybird
                Ignored
                says:

                Maybe it will be.

                But in order to believe that, people have to accept the premise that college administrators are behaving like profit-maximizing corporate shareholders instead of trustees of a public good.

                Which may lead to people asking why this should continue and what we as the taxpayers who pay their salaries can do about it.Report

              • Dark Matter in reply to Chip Daniels
                Ignored
                says:

                Good luck with that.Report

              • Michael Drew in reply to Jaybird
                Ignored
                says:

                In the short term what happens with student loan policy is with certainty going to be deflationary over the next year or so.

                Compared to a new baseline that’s established sometime down the road, the effects of the cancellation component of this policy might be inflationary. I don’t know how to pick out what the new baseline should be, though, nor how to identify what part of the inflation that’s happening in that environment is due to the ongoing effects that people have had this amount of debt cancelled.

                I don’t know that there’s any baseline to choose that makes the most sense here.Report

              • Dark Matter in reply to Michael Drew
                Ignored
                says:

                NPR was talking about how to calculate how much inflation was from the last stim check. For that matter, inflation is the economy over stimulated.

                Given that the virus is no longer an (economic shutdown) problem and that we are doing the whole “don’t have people pay loans” thing for political reasons, it’s something akin to an ongoing stim check.

                So the current high-for-us inflation level is going to be in part because of that. There are arguments for debt relief, fighting inflation isn’t one of them.Report

              • Michael Drew in reply to Jaybird
                Ignored
                says:

                I think… most. That’s what they do.

                Another thing they do is take out a lot of student loans.

                Another thing they do is celebrate for very-short term reasons. But I suspect their celebrations will die down quickly when they sober up and realize they’re not getting any more money than they’ve seen for the last 30 months from this announcement, and that they will soon be seeing a lot less money than they’ve been seeing for 30 months because of it.Report

              • Kazzy in reply to Jaybird
                Ignored
                says:

                Bwahahahahahaha!!! You’ll put infinitely more stock into my idle snarky musings because they support your priors than anything else I say. Beautiful, man. You’re one of a kind.Report

              • Jaybird in reply to Kazzy
                Ignored
                says:

                I put more stock into “here is something I have seen with my own eyes and heard with my own ears” than I do with some weird “here’s my theory, here’s how the data should fit into it” explanation.

                (Though I *STILL* think that the people showing up at the bar were examples of survivorship bias.)Report

              • Kazzy in reply to Jaybird
                Ignored
                says:

                False.

                See: Anytime I explain how schools work to you.Report

              • Jaybird in reply to Kazzy
                Ignored
                says:

                You have examples of me saying “no, that’s wrong” after you explain schools to me?

                Or just that I put “public schools with proficiency in the single digits” into different categories than “private schools” and don’t think it’s useful to put them in the same category?Report

  14. Philip H
    Ignored
    says:

    There’s going to be a not insignificant impact in Mississippi:

    The plan will not benefit those with private loans but could wipe away some debt for more than half of the nearly 439,000 Mississippians with federal student loans, according to an analysis by the Education Data Initiative. The average Mississippian with federal student loans owes about $37,000, one of the highest average debts in the country.

    The median earning for a Mississippian with a bachelor’s degree was approximately $43,500 in 2019, according to data from the Institutions of Higher Learning, while those with a graduate degree earned about $55,500.

    Of course, the state is part of the problem down here, as its perfectly happy to put more and more students into a financial aid pickle at public universities:

    Since 2008, the cost of college has steadily increased in Mississippi — due in part to a dearth of state funding — but family income hasn’t kept pace. At the same time, the Legislature has cut the amount of state grant aid available to college students. A 2019 study from LendEDU found that the average student loan debt in Mississippi is rising at the ninth fastest rate in the country.

    About 50% of students at public universities in Mississippi borrowed money to pay for college during the 2019-20 school year, according to federal data.

    https://mississippitoday.org/2022/08/24/how-bidens-student-debt-relief-plan-will-affect-mississippians/Report

  15. Slade the Leveller
    Ignored
    says:

    My wife and I were fortunate enough to put away some money for college for our kids when they were little are we were relatively poor. That, coupled with generous in-house aid, allowed our children to attend college without having to borrow money. I did make them kick in every year an amount based on the state of their bank accounts so they’d have a tiny sliver of skin in the game.

    The agreement going in was 50/50, with the parents being the lender and the (no longer) kids the borrower. Upon graduation, their present was forgiveness of the loan, each about $30K.

    Both of them got jobs after college, and lived on their own, paying their own way. The entry level salaries their were making were such that paying back a $30K loan would have made their lives pretty bleak. It was hardly hookers and cocaine to begin with, but at least they didn’t have a monthly loan payment hanging over their heads.

    The U.S. government pisses away plenty of money each day. If they want to piss a little bit of it away on ordinary citizens, I see nothing at all wrong with it.Report

    • InMD in reply to Slade the Leveller
      Ignored
      says:

      I find it hard to get exercised about the people benefiting from it. My wife voiced some frustration that neither of our loans are eligible. I prefer to feel deep gratitude that we are doing well enough we are able to finance them comfortably without help. With a little luck I may be able to eliminate mine at the end of the year, without a dime of assistance from anyone, which considering they started at $94k, will feel like quite the personal triumph.

      Nevertheless I would have liked it better if this came along with something, anything, to address the long term issues creating this problem in the first place. Knock on wood but it looks like my wife and I will make it out ok. It’s my son I worry about now, even though we are still a long way off from college.Report

    • DensityDuck in reply to Saul Degraw
      Ignored
      says:

      I find it absolutely disgusting that the White House would use its position of authority and visibility to go after individual citizens like this, solely on the basis of “they disagreed with the President over something”. I think this is an example of how democracy is crumbling.

      (checks notes)

      wait, Trump isn’t still President? Oh! Well, I guess this is okay then. Never mind any of what I just said.Report

      • Philip H in reply to DensityDuck
        Ignored
        says:

        I find it absolutely disgusting that the White House would use its position of authority and visibility to go after individual citizens like this, solely on the basis of “they disagreed with the President over something”. I think this is an example of how democracy is crumbling.

        I find it absolutely disgusting that sitting members of congress received PPP loans which were then forgiven – who then have the nerve to suggest that forgiving part of a federal loan for people who played by the rules is somehow wrong.Report

        • DensityDuck in reply to Philip H
          Ignored
          says:

          My dude, there were two more sentences in that post that maybe you ought to have read?Report

          • Philip H in reply to DensityDuck
            Ignored
            says:

            There are actually three more sentences (plus your parenthetical stage direction) – and I read them as your usual dismissive snark. If that’s not what you intended, then perhaps a rephrase is in order.Report

            • DensityDuck in reply to Philip H
              Ignored
              says:

              I’ll admit that “of COURSE I didn’t read the entire post lol” was not where I expected you to go with this oneReport

              • Philip H in reply to DensityDuck
                Ignored
                says:

                I read the entirety of this:

                I find it absolutely disgusting that the White House would use its position of authority and visibility to go after individual citizens like this, solely on the basis of “they disagreed with the President over something”. I think this is an example of how democracy is crumbling.

                (checks notes)

                wait, Trump isn’t still President? Oh! Well, I guess this is okay then. Never mind any of what I just said.

                I responded to the first paragraph. I found this snarky and dismissive:

                wait, Trump isn’t still President? Oh! Well, I guess this is okay then. Never mind any of what I just said.

                And based on your punctuation it has three sentences.

                Is that clear enough?Report

      • DavidTC in reply to DensityDuck
        Ignored
        says:

        “Congresspeople attacking the president’s policies are not fair game for the president to respond to in kind.” sure is a take.Report

  16. Brandon Berg
    Ignored
    says:

    For the past few months, I’ve been hearing about how six members of the Supreme Court are total hacks who just rule according to their policy preferences without regard for the law. If this is true, the Supreme Court will definitely shut this down. The Supreme Court might shut it down even if they are not hacks. I’m actually not sure what the law is here. The President unilaterally giving away hundreds of billions of dollars in taxpayer money sure seems like it should be incredibly illegal, but it depends on the details of a) how much power Congress delegated to the executive over this issue, and b) how much power Congress is constitutionally able to delegate.

    It’s possible that Biden is actually fully expecting the Court to tell him he can’t do this, and use this to drive the free-stuff voters to the polls so Democrats can get a solid majority in both houses.

    Anyway, I find it weird that so many people who expressed a great deal of certainty in their assessment that six Supreme Court justices are total hacks who will do what conservatives want regardless of the law are nevertheless celebrating this.Report

  17. Jaybird
    Ignored
    says:

    I will say that running stories like this one at the same time as the student debt relief stories seems to be a deliberate editorial choice:

    Report

    • InMD in reply to Jaybird
      Ignored
      says:

      Let’s be fair though. There’s no evidence to support the existence of the phenomena, string of fluff personal interest articles aside. So throw it on the growing pile of evidence that journalism has been overrun by the effete, self-absorbed, and insufferable, but the administration is hardly at fault for that.Report

      • Kazzy in reply to InMD
        Ignored
        says:

        “I recently learned about this term called ‘quiet quitting’ where you’re not outright quitting your job but you’re quitting the idea of going above and beyond.”

        This is nothing new. People have mailed in their efforts at work since the dawn of time. This generation is just dumb enough to A) think they invented it B) named it and C) brag publicly about it.Report

        • InMD in reply to Kazzy
          Ignored
          says:

          Add into that news reporters that mistake something trending on Twitter among a relatively small, peculiar socio-economic cohort to which they happen to belong for important national news and there you have it.Report

          • Kazzy in reply to InMD
            Ignored
            says:

            Yes. “Is this newsworthy?” is a question they either don’t or can’t answer.

            And then it canabilizes itself with reporting on the reporting.Report

            • InMD in reply to Kazzy
              Ignored
              says:

              That’s the most ridiculous part. When you pull the thread and realize scores of articles are reports on the report of some statistically insignificant noise on the internet.Report

        • KenB in reply to Kazzy
          Ignored
          says:

          I’m very open to the idea that this is overblown as a new trend, but it’s resonating for us where I work — partly for reasons common to many (pandemic fatigue, working from home giving more cover to slacking off) and partly related to our specific company & culture. A lot of folks seem to be working less hard than they did a couple years ago, and not just the Wallys but the ones who used to really care.Report

        • Chip Daniels in reply to Kazzy
          Ignored
          says:

          There was a thing floating around Twitter where some guy collected newspaper stories about how “nobody wants to work anymore”, and showed them occurring at least once a decade, going back to the 19th century.

          I can’t independently verify his research, but I do very distinctly hearing the old folks ranting about us soft and lazy kids in the 70s who just didn’t have the work ethic.

          And people who I know for a fact were lazy pot smoking slackers, now grown up and telling their kids about how hardworking and industrious they were back at Licorice Pizza.Report

          • Jesse in reply to Chip Daniels
            Ignored
            says:

            There was a Twitter thread about that as well (newspaper clipping of talking about the current generation being lazy and soft), but I can’t find it. Hell, there’s that famous Time cover (I think) calling Gen X slackers, and now Gen X writers favorite thing to do on Twitter is complain about the youths.Report

            • Chip Daniels in reply to Jesse
              Ignored
              says:

              https://twitter.com/ScottSeiss/status/1563519442667315200

              “When an employee only does what’s required its called ‘Quiet Quitting’;
              No, that’s called ‘DOING YOUR JOB!’

              “If I’m expected to go above and beyond, shouldn’t my pay?”
              Don’t expect something for nothing, right? Or is that only for poor people?”
              Report

              • InMD in reply to Chip Daniels
                Ignored
                says:

                I think Jesse is probably right but nevertheless, whenever this discussion comes up, I find the silence on policy to be strange. Corporate America has pretty well succeeded in making the employer employee relationships at-will and transactional. Why would anyone be surprised when workers behave accordingly? Like, isn’t this what you wanted?Report

              • Chip Daniels in reply to InMD
                Ignored
                says:

                The societal attitudes towards labor defy the econometric model that market fundamentalists like to portray, that labor is merely a commodity that is sold in a marketplace.

                No one thinks of labor that way, or behaves as if it were true.

                Our labor is viewed through the lens of morality. That working and working hard, is a moral obligation and anyone who doesn’t is morally deficient.

                By any measure, we are more productive, like by an order of magnitude, than our grandparents and yet we still get periodic freakouts over the idea of people being lazy and not wanting to work.Report

              • Dark Matter in reply to Chip Daniels
                Ignored
                says:

                There is a world of difference between my productivity and the productivity of some of my relatives. My pay reflects this.

                In general, labor productivity (when positive) isn’t a subject that requires “morality” nor even discussion on how “hard” someone works. I sit in a chair all day when I’m working. It’s fine, I’m a software engineer.

                Where we end up in “morality” territory is with freeloading and negative productivity issues/people. That can be a problem no matter what the “average” productivity of an entire people are.

                As for people who want to work less “hard”, whatever man. There’s lots of opportunities, you can fill whatever economic nitch you want. It’s only my problem if you’re reaching into my wallet.Report

              • InMD in reply to Dark Matter
                Ignored
                says:

                I think Chip is right though in the sense of what work means in a philosophical or moral level versus what it is in technocratic economic theory. There’s a dignity in work, and a not totally unjustified judgment of those who can but won’t, at least up to a point.

                At the same time, I’m about to spend my Sunday afternoon knocking out a bunch of work stuff (something I’m sure is familiar to you in your job). Naturally I will find a reason to cc my supervisor and/or other senior personnel on something when I do this to remind them of my above and beyond dedication. But I’m a senior level in-house attorney with a competitive compensation package, and the moment I feel it no longer is, I can and will put my flag up on LinkedIn so recruiters will call me. Which I can feel pretty confident will happen.

                But do I think it’s reasonable to expect the efforts I make of someone whose best case scenario is a 4% instead of 3% annual increase and a little bonus around Christmas? Of course not. And those people are all things considered doing relatively well, compared to working class or service industry people. To me the idea that they should be killing themselves is the mirror image absurdity of, I dunno, anti-work on reddit or whatever.Report

              • Dark Matter in reply to InMD
                Ignored
                says:

                Sure, all of this is right. I don’t expect the min wage crowd (i.e. daughter #3’s co-workers) to be knocking themselves out.

                I do expect the interns will attempt to try to impress me, whether that means working longer or smarter is on them.

                Now to be fair, my company does internships right. They’re well paid and it’s a many month interview/training session and our major pipeline for hiring people.Report

              • Dark Matter in reply to InMD
                Ignored
                says:

                Like, isn’t this what you wanted?

                Yes.

                And I don’t treat seriously a handful of people saying they only do what they’re paid to. It’s fine. A job isn’t a family.Report

    • Jaybird in reply to Jaybird
      Ignored
      says:

      I’ve mentioned before how one of my gauges for employment is the whole help wanted websites thing.

      Is the ad targeting people looking for jobs?

      Or is the ad targeting employers who want employees?

      One of my email addresses still gets help wanted emails from one of those places I signed up for back in 2012/2013. I don’t go through them, just check the subject heading before I delete… there was a period where the subject heading just mentioned stuff like 7-11, Burger King, and the like. Occasionally a King Soopers would show up and I’d make a small joke to myself about how the guy who stocks the soup shelf doesn’t go home and think about his job.

      In recent months, I’ve watched the subject heading change from mentioning jobs like that to… lemme check my trash bin… University of Colorado, Charles Schwab, Bank of America…

      It kinda reminds me of the late 90’s. But the 90’s had a release pressure valve of “Outsourcing” and “Global Sourcing” that did a great job of sending multiple copies of my job to Singapore.

      That release valve isn’t there anymore.Report

  18. Jesse
    Ignored
    says:

    Hey – actual polling – https://twitter.com/arindube/status/1563603302566113282 – shows forgiveness is actually more popular among the non-college educated than the college educated (outside of those w/ graduate degrees).

    This makes sense, as the people online most actually upset about this seem to be the “I suffered to pay off my loans, so should everybody else” brigade.Report

  19. Dark Matter
    Ignored
    says:

    Biden’s plan will cost somewhere between $500 Billion and $1 Trillion dollars.

    https://budgetmodel.wharton.upenn.edu/issues/2022/8/26/biden-student-loan-forgivenessReport

    • Jaybird in reply to Philip H
      Ignored
      says:

      Here’s the theory that I saw that explains this:

      Report

      • Dark Matter in reply to Jaybird
        Ignored
        says:

        The problem seems to be privately issued loans, as opposed to gov issued loans. Presumably buying votes with gov money is fine but buying votes with someone else’s money isn’t.Report

      • Philip H in reply to Jaybird
        Ignored
        says:

        That’s my point – rather then force the confrontation – and make these people say in court under oath why its bad to forgive these federally backed loans, the Administration is chickening out. It won’t stop the litigation, because the fight is all about power not the actual loans.Report

        • Jaybird in reply to Philip H
          Ignored
          says:

          I imagine that there might be a technical question somewhere of “if there is a good thing that the government didn’t have the authority to do, but could do by ignoring that it didn’t have the authority to do it… should it do it anyway?”

          There are people who say “it could do something good? IT’S OBLIGED TO DO IT!!!!”

          There are people who say “You hammered that out when you said it doesn’t have the authority to do it.”Report

        • Dark Matter in reply to Philip H
          Ignored
          says:

          So this is how liberty dies…with thunderous applause.
          -Senator Padme Amidala

          Giving Joe the ability to do anything he wants with anyone’s money is also giving Trump that ability.Report

          • Damon in reply to Dark Matter
            Ignored
            says:

            I’ve been assured by various people that there IS a difference, and if you can’t see that the good side is indeed good, you must belong to the dark side. The good guys never abuse power. Are you a good guy or a bad guy? Support the good guy or be branded bad.Report

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