Student Loan Forgiveness: Watch What Unfolds from Here
Bernie 2020, Public domain, via Wikimedia Commons
Student loan forgiveness. It’s an…interesting concept for sure. Cancel student loans, which the Biden Administration suggests they are considering. See this article from The Washington Post, which broke yesterday and got the internet abuzz.
“Let me be clear” – to use the four words President Biden loves to use – that this is an awful idea.
Also, because the internal polling must be *really* bad, I would put it at a 95% chance of happening. (Yes, this is an upgrade from my 70, 75, 85% scores just a day or so ago.)
We Have to Do Something.
Those are often the scariest words in the English language. When we *have* to do something to combat a crisis, it most-often leads to horrible results. See COVID response lockdowns, or the Patriot Act after 9/11.
But because the polling is bad and student loan forgiveness can be a signature issue, the time is apparently right now for this.
What I’ve decided to do today is apply the Own The Narrative framework: the 8 Rules (or “Guidelines,” or “Categories”) behind the narrative control you’re about to see.
Watch and learn.
Start at the Finish Line
Olympians don’t merely train to become the best; the best of the best actually envision themselves at the podium with the gold medal around their neck. Sure, they need to backtrack from there: If I’m swimming the 800 free and I’m Katie Ledecky, I have to analyze every stroke, and I have to make sure my turns are down pat, and that I’ve conserved the right amount of energy. But I see myself winning before I start the race.
The Democrats have started at the student loan forgiveness finish line here. They’ve thought past the sale, and they see what the Utopian world they’ve envisioned looks like from the medal stand.
This is why you see what you see already:
.@POTUS has the power to transform the lives of millions of Americans by canceling student debt.
The payment pause has been a lifeline — and it’s time to deliver permanent relief.
Cancel student debt, Mr. President. https://t.co/K7KwpU6g8Q
— Elizabeth Warren (@SenWarren) April 26, 2022
Folks like Senator Warren aren’t looking at this from the lens of the negative impact on the economy; they’ve instead applied the “well, we’ve benefited from a pause in payments, why not cancel payments???” filter.
Identify A Boogeyman
Lots of boogeymen here. Lots of them. Big Education? (Even though folks like Sen. Warren were, indeed, high-priced lecturers at various big-name schools.) The Economy? Yes, the obstacles are all there. The Patriarchy? That’s an easy one: because the system has already benefited so many (straight) (White) men, it’s set up to fail everyone else. No shortage of boogeymen.
Make Hubris Your Friend
Hubris: too much self-confidence, bordering on arrogance, that assumes you can control the situation. It’s $1.6 TRILLION after all.
Think in the context of Milton Friedman – who famously said “inflation is, always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output” – vs. Jerome Powell – “Money Printer Go BRRRR” – and figure out which one is guilty of hubris.
The Democratic approach here is pure hubris: cancel the debt and we’ll figure it out.
Practice the Art of Cherry Picking
Cherry-picking data is an easy one here, as the statistics you’ll see will only tell the story that the Democrats want to tell: things about the average amount of student loan debt at $57,520 (!) (see this Nerd Wallet article) or the fact that 43 million Americans have student loan debt.
You won’t hear about who is on the hook for the money, if it is forgiven – the Federal Government! Well, that means you, the taxpayer! – and you won’t hear about the roughly 14 million borrowers (using stats from the NerdWallet piece) who have been paying without a deferment or forbearance.
Be the Name Dropper
This one could also be called “Success by Association.” Take a look at what happened in Croatia a few years back, when the government canceled a lot of citizens’ debts; also expect to hear about the time John Oliver bought a bunch of collection agency debt just so he could forgive it (even though the debt was likely a “lost cause.”)
Use Malleable Definitions to Your Advantage
Expect to see appeals to three keywords, all of them with definitions that are at the very least mercurial. In the name of “Diversity,” “Equity,” and “Inclusion,” “we need to do something.” You’ll see stats about all three – and you can probably cherry pick the ones you like best – in this article from Education Data. The definition of diversity, in this case, is one that will ignore the plight of any Asians who are struggling with student loan debt, as those won’t fit the narrative. Ditto equity; inclusion here will mean leveling the playing field so that more people are able to take part in the economy if they have a boatload of debt written off.
Embrace the Metaphysical
“You want to be on the right side of history.” Appealing to a higher calling, or the fact that it’s in the Bible – Proverbs 22:7 “The rich rules over the poor and the borrower is slave of the lender” – the Left is already embracing something metaphysical here. For the good of our people.
Highlight the Second- and Third-Order Impacts
There’s a little bit of cherry picking here, too: the second- and third-order impacts that you’ll hear about are only the positive ones (in their eyes). You’ll see someone on stage, when the Executive Order is signed, talking about how the extra $1000 a month they don’t have to pay for their student loans will indeed mean that they can buy a house, and afford to send their kids to college someday.
You won’t hear about the fact that other groups will have their hands out: “if I paid off my student loans years ago, am I getting money?” Those second- and third-order impacts won’t be whispered.
Final Thoughts
Every year around the Academy Awards, the Chicago Tribune used to put out predictions of both “Who SHOULD Win” and “Who WILL Win.” I mention that because I don’t think student loan forgiveness SHOULD happen – I think it’s an awful idea and will wreak havoc on the economy.
But, I think, given everything above, that it most certainly WILL happen. And the Democrats will follow this playbook.
I think that the best way argument against student loan forgiveness is to just lay out the numbers. Typical student loan payments for a given degree are a fraction of the wage premium associated with that degree. For example, the bachelor’s degree wage premium is nearly $30,000 per year, while payments on the average debt for recent graduates are on the order of $3-4,000 per year.
It’s true that a small fraction of borrowers have, through bad luck or bad choices, gotten in over their heads and are unable to pay their debts. This is also true of credit card debt and mortgage debt. This may be a good reason to loosen restrictions on discharging student loan debt in bankruptcy, but it is most certainly not a good reason for a $1.7 trillion middle- and upper-class giveaway.Report
Your approach makes too much sense. SO…yeah, the odds are slim that it happens.Report
I do, however, support forgiveness for former Elizabeth Warren supporters. As long as they denounce her as a charlatan and admit that they made a terrible error in judgment, it shouldn’t be held against them going forward.Report
There is a huge disconnect on this issue that I have a hard time working out. Biden’s support from young people is dropping. One of the main reasons for this is that he is not doing anything to cancel student loans. He was the candidate who embraced it the least during the primaries. As far as I can tell, he had ONE tweet that stated he supported CONGRESSIONAL ACTION on forgiving 10,000 dollars on student debt. Younger voters seem very upset that Biden has not used his non-existent absolute monarch powers to declare to declare a student loan debt jubilee.
The 2020 Democratic Primary candidates who made the most hay about student debt got nowhere near the nomination. Disclosure, I voted for Warren in the primary. I do not have student loans.
Yet other people seem convinced that anyday now, student loan debt is going to be forgiven in a grand jubilee and this upsets them because they oppose it.
I make no comments on the merits of student loan forgiveness as a policy but I always find disconnects on issues curious. It is like watching people on the same planet inhabit two different universes.Report
I blame a fundamental and quite general illiteracy about how our system of government works among the public at large. It’s not helped by a media environment that IMO encourages totally unrealistic wishcasting and expectations.Report
To be slightly fair to Americans, the American political system is a lot more obtuse than the parliamentary systems where the majority party or coalition can do what they want until an election happens. Saying that popular bill based the House but was defeated in the Senate 58-42 because of the weaponized filibuster is just strange sounding. This helps Americans see the President as some sort of Bronze Age Preist-King that can work magic. That and Hollywood movies.Report
I haven’t looked into the details, but apparently there’s an argument to be made that there’s a loophole Biden could abuse to unilaterally forgive an arbitrary amount of student debt. Something about authority to renegotiate terms. Whether it would withstand a legal challenge is unclear (to me, at least). He’s already used executive power to forgive student loan debt for a small subset of borrowers who have been permanently disabled or went to fraudulent schools, and also unilaterally suspended repayment requirements.
That said, he’s been saying he’d look into it ever since he took office, so hopefully he’s just paying lip service.Report
To be clear, I don’t have any objection on policy grounds to the loan forgiveness Biden has performed thus far. I’m more worried on procedural grounds: If the executive branch can forgive even one loan unilaterally, why can’t it forgive all of them?Report
The majority of student debt held by individuals is around 20k or so. This is from people who attended dubious vocational programs at for-profit institutions with questionable value.
There is probably a very utilitarian value of student debt relief (around 20 to 30K) that helps the most people and gets the Democrats no credit. They will be attacked on the right for being too generous and on the left for being too stingy.
The worst part of the student loan debt debate is that it focuses on the minority of people who have six figure debt.Report
Yes, the obfuscation here is real.
And the challenges will be even more real once some semblance of this happens.
I did the math: total student loan debt amounts to $4800 or so per American. It would be less controversial to just give everyone a check for that amount. And it would be an equally dumb idea.Report
Not all Americans hold student loans. The elderly certainly don’t. Children don’t (yet). And even among working Americans its not the full proportion of the population. So can you show your work on the math?Report
The majority of student debt held by individuals is around 20k or so. This is from people who attended dubious vocational programs at for-profit institutions with questionable value.
No, this is not correct. While the majority of borrowers have less than $20,000 in debt, the majority of debt is held by the 16% of borrowers who have at least $60,000 in debt, the vast majority of whom went to graduate or professional school.
Students who went to for-profit schools do hold more debt than undergraduates who went to public or private non-profit unversities, but not that much more, and they’re a single-digit percentage of total borrowers. The vast majority of student loan debt is good, in the sense that it’s held by people who went to legitimate universities and are perfectly capable of making payments on it.
Source is here.Report
Good essay.
Let’s agree, for the moment, that we have a problem with a whole ton of people out there who have degrees that everybody agrees are not worth what the students paid for them. (Or worse: “Some College” that isn’t worth what the student paid for it.)
Paying off the debt doesn’t address how the institutions are still out there providing these degrees that everyone agrees are lemons.Report
Correct.
One of the proposed approaches I’ve seen on Twitter is to completely dismantle the Federal Student Loan program. And the Department of Education. And the existing higher education system. And Harvard. And…
Well, that’s really extreme. But once this debt gets forgiven, how do future students go about their business? How do schools go about their business?Report
This is why I like “make it dischargeable in bankruptcy”. If you have a degree that everybody agrees is a lemon, then discharge the debt!
Everybody agrees you shouldn’t be on the hook for it!
And the problems naturally take care of themselves from there.Report
We love to treat symptoms (student debt) and not the disease (the cost to attend college).
For an administration so interested in “root causes” you’d hope they might think about the problem and not just the campaign promise.Report
I’d love for inflation adjusted costs of state run universities and community colleges to go down to what it was when I went to school. Problem is the federal government can’t directly control that because of federalism and all.
For reasons that have never been clear, a number of states have made it a point to cut state funding to such universities and community colleges, while demanding ever better educational outcomes. Chasing federal research dollars fills some of the gap, but absent the support of the federal student loan apparatus, those states would see their university networks dry up. Those states also tend to be low tax rate states.
Contrast that with, say, New York where a basic state run university bachelor’s degree is essentially free now if you remain in the state for so many years. And the citizens are taxed accordingly.
Your call which you find the “better solution.”Report
When we talked about this a million years ago, Doctor Jay pointed out “I went to the University of Washington. The last year, my tuition was $220/quarter, and that was after it had just gone up. It was the late Seventies, that number is bigger if adjusted for inflation, but still a lot less than it would cost me now.”
I wrote back:
The argument was about the drastic cuts being made between then and now.
That’s more than $5000/year per student in 1979 dollars.
I have never seen any evidence that the subsidy given in the past per student was ANYWHERE NEAR that.
That’s more than $20000/year per student in 2019 dollars.Report
Some back of the envelope math…
How many students go to the University of Washington? Google says 46,801.
So let’s make that 45000 because I am lazy.
45000 x 20000 is 900,000,000. 900 million, if I counted zeroes correctly. .9 billion.
It’s almost real money. Almost.
So if the state of Warshington gave almost a billion dollars a year to the Uni, the Uni could have 1979 prices for one year. (And only that university, mind. None of the others.)
I have no idea what to think about this.Report
I think it means we need to decide if university education is a public service – and fund it accordingly, or an investment, to which only those with means should be enticed. We are no longer, in most places doing the former, and we steadfastly refuse to acknowledge the latter as the outcome of the current path.Report
If it’s a public service, we probably need to have a conversation about the public good provided by the strawman degrees (dance theory, marionette arts, etc).
Because I could easily see the argument that we, as a society, benefit from yet another freakin’ coder with a minor in freakin’ business management.
“Are you saying that a degree in the strawman humanities is a luxury?”
“If we agree that it’s a status symbol that is not worth what is being paid for it… haven’t we already said that?”Report
Or the answer is people should be free to choose their own path that works for them. “We” shouldn’t be choosing for them. Of course yammering about strawman degrees is meant to stomp all over that so what you gonna do.Report
Or the answer is people should be free to choose their own path that works for them.
It’s the whole realization after-the-fact that they say “Hey, this bullshit degree isn’t worth what I paid for it!” that I’m hoping to avoid.
Because, lemme tell ya, the degree ain’t gonna be magically worth more if I pay for it instead of them.Report
In reality, educational attainment is at an all-time high, with 40% of people age 25-34 having college degrees, compared to 35% in 2014, 30% in 2002, 25% in 1995, and 20% in 1974. See table A1 here.
It’s weird how much of left-wing ideology is based on misconceptions that can be debunked in five minutes with Google and Excel.Report
Its sad, oh so sad, that the right continues to refuse to engage with the actual problems. NO here in many many comments said anything about attainment. If anything those figures prove how dedicated Americans are to education, since the financial cost keeps escalating.Report
You said that the “outcome of the current path” is that university education will become “an investment, to which only those with means should be enticed” (sic; I think maybe you meant entitled).
This is the exact opposite of the trends which we are actually observing, which is that the share of the population that’s getting bachelor’s and advanced degrees just keeps growing. And as I documented in the very first comment on this thread, they’re doing so with eminently manageable debts that are utterly dwarfed by the lifetime college wage premium.
See also my 3:14 comment which shows that tuition and fees net of grants are rising more or less in line with overall inflation. Posted tuition prices are not at all indicative of what average students actually pay.
Furthermore, what we are actually seeing, in the form of high posted tuition prices and extensive third-degree price discrimination, is that a university education is treated as something that the lower and middle classes are entitled to purchase for a modest, heavily-subsidized price, while wealthy families are expected to pay through the nose to send their children to college.Report
Note that there are typically three quarters in an academic year, not four. The fourth quarter is summer, and while many schools do have a summer quarter. So we plug in $660 and inflate from 1978 to 2019, and we get back about $2,620. What was the average tuition price net of grants at public four-year universities in 2019? $2,640!
It seems that what happened is that government subsidies have shifted away from providing heavily subsidized tuition for everybody and towards need-based financial aid, including things like Pell Grants, but mostly the universities themselves offering sliding-scale tuition.Report
The second sentence should have been “While many schools did have a summer quarter, most students take off at least one quarter per year.”Report
We gave $1.7 Trillion in tax “relief” to corporations and mostly the uber rich (the average American netted $600 per year as I recall) in 2017. The cuts didn’t trickle down, they have not yet paid for themselves, and corporations mostly spent them on stock buy backs. When the left howled we were told to go sit quietly in our corners.
Forgiving student loans has a maximal reach economically, and mostly to people that will spend the money. But hey, there’s no need for supporting actual working Americans right?Report
Without getting into everything wrong with the rest of this comment, I want to touch on the point about share buybacks, because I think it’s a good teachable moment. Far from being proof that corporate tax cuts were bad policy, an increase in share buybacks is an expected consequence of eliminating an inefficiency caused by high corporate income taxes.
When a corporation has profits, there are two things it can do with those profits:
1. Reinvest them internally.
2. Return them to investors via dividends or buybacks.
Note that the second option does not reduce total investment, as is commonly assumed. I suppose that there are some small individual investors who go on a shopping sprees when they get dividend checks, but most investors, especially institutional investors, will just reinvest the money elsewhere.
Now, in a world without taxes on corporate income, dividends, or capital gains, the choice comes down to the question of whether the corporation has internal projects in need of funding that are expected to beat the market. If so, it should reinvest its profits in those projects. If not, it should return profits to investors so that they can invest the capital more productively elsewhere.
When we add taxes on corporate and personal investment income into the mix, things change. Now there are tax advantages to reinvesting the profits internally. First, expenses and depreciation can be deducted from corporate income tax, resulting in tax savings. On top of that, investors take a tax hit on dividends and buybacks. So if the risk-adjusted market rate of return is, say, 8%, then instead of needing an 8% return to beat the market, an internal project might only need a 6% return to beat the market after accounting for the tax hit.
This creates a lock-in effect, where corporations end up reinvesting money in internal projects when it could be more productively invested elsewhere. This is not a good thing. Not only is the capital being used inefficiently, but this also encourages more market concentration and makes the biggest companies even bigger.
Conversely, when corporate income taxes are cut, this weakens the lock-in effect, and a predictable consequence of this is that large, mature corporations with limited growth opportunities return more capital to investors. This does not reduce the total amount of investment, but rather reallocates it more efficiently.
There’s the BS asymmetry principle for you. All that to explain what’s wrong with one sentence.Report
I wasn’t actually making a judgement about the practice – merely pointing out what was done with the money. Which we knew would be done with the money because numerous CEO’s at the time said that’s what they would do with the money, while Republican politicians crowed about how it would translate into more innovation and more investment which would in turn spur economic growth that would be big enough to pay for the tax cuts.
My point was that if we could give that sort of tax relief to major corporations and the ultra rich without worrying about its consequences, and knowing the money wouldn’t actually go into circulation, we as a nation ought to be willing to do the same for ordinary borrowers.Report
I’ve said before that there is a shadow problem to this that I don’t think people understand. First, yes, there absolutely need to be more safety valves, and probably not just via bankruptcy. Second the loans need to be conditioned on certain institutional cost controls, and interest rates on them need their own relatively low caps.
What no one ever talks about though is the role the current system plays in supporting a critical social compact (some might call it a fiction but I think that’s way too strong) that if you can get in, you can go, regardless of means. The more controls you put in place, the less true that will be, and the more caveats you will need to add. So any refoem needs to keep in mind how well that plays out in a post industrial society that’s already suffering from some populist discontent. To put a finer point on it, at a certain point it will mean telling the girl from the bad part of town or some dying suburb somewhere, who got straight A’s her whole life, that she can’t go to university. She will be her own sort of outlier no doubt, but the headlines will write themselves and be far more compelling than the upper middle class kid with a $300k degree in puppetry.Report
The 300K degree in puppetry is a bit of an over statement. The most common degree in the United States is business and it is this by a significant amount. Arts and humanities majors only thrive at elite institutions where the name of the degree granting institution is guaranteed success nearly unless one is a catastrophic screw up.
That being said, one way other nations do control the cost of university is through relentless tracking and the American system for all its faults does seem to be forgiving of late bloomers the most.
The other big issue with the elite American schools is that they admit far fewer students than are worthy by their own criteria. Many admissions officers have admitted this openly admitted that they can fill freshman classes five times over and not suffer in quality of applicant.Report
Most of the private for-profit colleges don’t even offer humanities degrees. Almost all of them are entirely technical schools things like medical technicians or computers or electronics, i.e., the “hard” STEM kind of courses everyone keeps saying that young’uns ought to be studying.Report
What I’m really getting at is the navigation of trade offs and hard choices. And you’re also absolutely right that it rolls further down the chain than universities. The 300k puppetry degree thing I agree is a morality tale that dodges the hard policy choices. I’m juxtaposing it to another tale that could crop up, if we make certain other hard policy choices.Report
At least on continental Europe, the university experience tends to be a lot more spartan than the American experience with few thrills. A lot of this is historical though. American universities started off as clergy and elite finishing schools like Oxbridge, did a serious turn towards the Gerrman research university in the late 19th century and stopped halfway in the early 20th century.Report
Student loan debt is, as others have pointed out, merely the symptom of the skyrocketing cost of higher education.
I’ve never seen a good explanation for why college costs are escalating so rapidly, but the one that explains the most seems to be exorbitant growth of administration. And until those costs can be reined in there will just be endless symptoms to treat.
Having said that, not all student debt is the same. Some is held by graduates of prestigious universities by people who have excellent job prospects, while at the other end of the scale, some is held by dropouts of for-profit scam universities who have terrible job prospects.
One of the best things that Obama did was curb the abuses of the private colleges, but I’m not sure if there is much left there to change.
But of course, no discussion of student debt would be complete without a reference to the fact that free higher education is not just possible, but was the reality in the decades after WWII.
It was changed by choice.Report
Judging by the university where I work, tuition keeps rising because they have a constantly metastasizing top heavy administrative structure. Although I could check with the Assistant Relationship Coordinator and see what he says about that.Report
People seem to forget that we already have a means testing program for cancelling student debt, but it was so incompetently created and administered that almost no one got to take advantage of it.
Perhaps, before cancelling all student debt, the program should get fixed (& perhaps tweaked to be a bit more forgiving).Report
Biden’s admin has actually been pretty good at cleaning up this mess and getting more student loan debt forgiven/erased. I just saw an article in Fortune about 20 billion in debt being forgiven/cancelled. But he does not get credit for this because the right wing is quite adamant that bailing out banks is one thing but an individual debt should be met with Victorian abhorance and the very online section will not be satisfied by anything less than total cancellation.Report
I’d be thrilled with this being the final outcome, because its better then before. But $20 Billion worth of solution of a $$1.5 to $1.7 Trillion problem isn’t statistically enough to move the needle.Report
This assumes that all of that $1.5 T is a problem. We know it isn’t, not even remotely. I just finished paying off my wife’s student loans (mine were done a few years ago), so I didn’t need a bailout.
So first you need to identify just how much of that total debt is in danger of default.Report
I don’t see default as the only or even best trigger. When you have 12% of people earning an associates degree from a for profit “university” who emerge debt free; or 17% adding in four year degrees; your problem becomes the institution not the student.Report
Hey, you want to tackle the rising cost of higher education, I’m all for that. But solving that issue doesn’t address the current debt problem.
I mean, IMHO, the feds should fix the debt relief program, and as an added twist, whatever debt the federal government forgives should be sent right back to the schools as a bill.
PS, as for your stats, again you need to say more. If 80% of the students leave school with debt, your first question has to be, “How much?”.
If 95% of those with debt have $20K or less in student debt, I don’t see that as a huge problem. If those with debt over $20K* are more than able to repay that debt through being able to earn higher wages, again, I don’t see much of a problem. Certainly not one requiring a clearing of the board.
Let’s make sure we aren’t trying to kill a flea with a cannon.
*And let’s remember that student debt is very often NOT tuition debt. Students can take out a whole lot more in loans than the cost of school. My undergrad tuition was paid for by the VA, yet I took out a couple of thousand in loans every year just to ease the burden of having to work to pay bills. We should be looking at how much debt versus the actual cost of attending that school and put the extra in a separate column.Report
The government of these United States subsidizes all sort of things. Why not this one, too?Report
I am vaguely for subsidizing public goods. I am vaguely against subsidizing luxuries.
“But the government already subsidizes luxuries.”
“I know.”Report
Again, why leave this one out, whichever category you think this fits into?Report
If we want to make University a public good, I’m vaguely for that.
But if it’s just a luxury? I’m for leaving this one out because I’m vaguely against that.Report
It’s one thing to subsidize. It’s another thing to do a one time bail out and not fix any of the issues that got us here. And to be clear, I’m with you in the sense that of all the questionable bailing out the US government does this would be far from the worst. It just makes no sense to do it with no intention of even trying to avoid being in the exact same boat 20 years from now.
Really it’s a great issue for a bipartisan, technocratic compromise. AKA the thing Congress refuses to do anymore.Report
bingo!Report
Very well said, InMD. While I am not on board with cancelling student debt, I’m REALLY not on board with cancelling student debt that isn’t part of some sort of broader reform effort aimed at all the things that went into creating the supposed student debt crisis.Report
Honestly, the real hard hitting solution to this is to end all gov’t. subsidized loans. The tuition increases we’ve seen since loans like this became commonplace are almost assuredly the result of the money spigot being turned on.
Perhaps a means test, or if you’ve made payments equal to the balance of the loan and still have a balance. I don’t know if there is a good solution, but the amount of debt is a drag on the economy. Maybe some EO forgiveness will spark a conversation.
Like you said, though, unlikely to happen given the current state of our legislature.Report
This, of course, is the correct take.
It’s bad policy that will make other bad policies worse. First address funding for future students/higher-ed then address debt. Doing debt first is, I’ll say it, stupid.
There’s also the politics of it all. On the one hand giving away $1T should pay handsomely in a democracy… but on the other this particular giveaway carries a risk that it’s so mis-targetted with regard the beneficiaries and Democratic Alignment that it carries the potential of becoming an own-goal. Especially as it can be used by an opposing party to hasten/extend dissention within the other faction. (As Ruy Teixeira talks about just today in what he calls the Dem’s Pennsylvania problem).Report
Yep, I’m sure the GOP, should they want to, can cheery-pick all manner of examples of students who took out massive loans, partied their assets off during school using the excess that didn’t go to tuition, and now get it all forgiven.Report
Yea as I said to North below it’s bad politics to do it right now, possibly also not great for the inflation situation. If Biden feels like he needs to do anything it should be very limited and only for those where there’s a pretty severe issue of means to pay. Basically tiny number of easy cases only.
Where I may differ to some degree is openness to a pretty major forgiveness program, it would just be post reform. I have no sympathy for the creditors, the universities who took the free money, or anyone else involved in lending or processing these things under the existing system. They’re as culpable as some dumb kid who bit off more than he or she could chew, more really IMO. At some point you have to just release people and accept that whatever bad choices they made it doesn’t justify a permanent punishment or an endless windfall for some collection racket.Report
Agree, unless the system is seriously reformed, a blanket forgiveness is a bad call. Especially when we have a way to deal with the most egregious & sympathetic cases.Report
I’m open to debt reform (hey, Jubilee years should become a thing again… just wait until we esablish the North American Empire of Guadeloupe) but the thing about all this talk is that it basically does the opposite of giving haircuts to lenders and schools — there’s literally no hair-cut and, in fact, basically a marketing campaign to double down on borrowing to fund lender and school expansions.
That’s the point, of course, of doing the hard work of reforming the funding first… you have to put schools and lenders on the hook first… and that will inevitably shrink access to funds in all sorts of ways predictable and un- … but eating Govt. backed securities by the Govt. is exactly the kind of punishment financial markets and Universities are willing to suffer. And suffer again as needed.Report
The ancient rule of broccoli before cookies.Report
Jubilee is great, as long as you’re not one of the poor saps who needs a new loan in Year 49.Report
What? 11-month balloon loan.Report
Usury finds a way.Report
What will be the effect on inflation if student debt is cancelled?
And who is due for repayment but is suddenly now going not going to get paid? And what are the consqeuences of that?Report
Over all cancelling student debt is inflationary. Most of this money is either owed to the feds or is owed to people who have debt guarantees from the Feds. So cancelling student debt increases federal dept and increases the money supply (people who don’t have to make student debt payments can start spending that money on other things).
This effect is moderated a bit because a lot of student debt hasn’t been collecting payments since the pandemic started so its deflationary effect (removing money from the economy for debt repayments) has been suspended.Report
I’m still not sold on why reinstituting that debt is a good idea economically or morally. YMMVReport
Why is it immoral to ask people to pay back money they borrowed?Report
Why is it moral to give massive unearned tax cuts to corporations and ultra wealthy Americans while driving up our deficit and national debt?Report
That doesn’t answer the question. I’m not defending that. But if you’re going to make a moral claim, be prepared to make a moral argument.Report
The argument I’m responding to is that its not ethical or moral to forgive student loan debt because the borrower agreed to the loan and has an obligation to repay it. My response is to compare that stance to the utter lack of moral discussion around tax cuts that deprive the government of revenue in favor of the dubious claim of trickle down. If its moral to enact those tax cuts, knowing they won’t do much economically (and we have 40 plus decades of data that tell us so), its moral to forgive a similar amount of student loan debt.Report
Or strategic defaults and bankruptcies.
“Chip” didn’t borrow any money. That loan was to Chipco, LLC the student borrowing entity of Chip International.
And sadly, Chipco is now definct with no assets.Report
Ummm Kazzy isn’t a Republican and to my knowledge he doesn’t carry any brief for their tax cut giveaways. So how does bringing Republican tax policy up in a discussion about student debt relief have any salience at all?Report
Kazzy the Conservative!Report
just a non-stop stream of Republican talking points from that Kazzy guyReport
I can’t make the line any straighter guys.Report
You’re argument is a conditional one: IF X is moral, THEN Y is moral.
I don’t accept that X is moral.
So now what? Convince me why Y is moral.Report
To start you have your X and Y backward. Its a matter of law – and policy for one political party in the US – that massive tax cuts for corporations and ultra rich Americans are both a moral and economic requirement.
If that’s so and will remain so – and I disagree vehemently with both the moral and the economic parts underpinnings of the tax cuts – then its equally moral to forgive the same dollar value of student loans because that forgiveness will have significantly more economic activity generated from it. Frankly I see the loan relief – particularly given all the structural flaws discussed elsewhere in this thread – as the moral thing to do anyway.Report
Kazzy,(and I) doesn’t accept that the GOP’s tax cuts and trickle down economics were good policy or moral policy. So the your line is straight-into a brick wall.
And if we reverse the causality. If you’re advocating for this loan forgiveness that means you’re saying you believe the GOP’s tax cuts and trickle down economic policies were sound and moral ones? Who are you and what did you do with Philip H?!?!?Report
See my clarification above.
I’ll make it simpler – our nation frittered $1.7 Billion on tax cuts for people who did little to enhance economic activity with the money. If we can afford that, we can afford to spend a similar sum on people who will actually contribute the funds back to the economy.Report
That isn’t a moral argument.Report
That’s not a moral argument, that’s a kindergarten argument. “They blew 1.7ish billion on cookies for billionaires so I should be able to blow another 1.7ish billion on cookies for the millionaire College Presidents and all those kids out there with student debt!”
If you were arguing with republicans maybe it’d even make some semblance of sense but you’re arguing with Democrats and leftists. It’s barely coherent, let alone persuasive.
And with our current inflationary difficulties point out that student debt relief would be economically stimulative is like shooting yourself in the knee.Report
The arguments I keep hearing against the program are equally unpersuasive. to wit:
1) They agreed to repay so they have an obligation to repay.
2) I repaid my loans so they should just buck up and pay it too.
3) We as a nation can’t afford the $1.7 trillion hit since it comes back to tax payers footing the bill.
4) Fully forgiving the loans would cause more inflation.
5) Most of the loans are held by people who have the ability to pay so it won’t help the folks that really need it.
Every single one of those contains a moral argument and an economic argument. The tax cuts (which were of the same dollar value) were sold with similar combined moral and economic arguments.
So for me, its a really really simple discussion – the moral and economic arguments for giving those tax cuts were beneath the pale. The economic ones were rubbish and hey – we didn’t get the economic bounce out of them we were promised because we couldn’t get it. And morally the corporations and ultra rich who benefitted from them didn’t actually deserve them. And yet that tax policy is the law of the land.
forgiving student loans in a similar amount is far more moral because it frees people to do things they might not otherwise do. will some people with no economic need be helped by such a program – probably. Same with any government program. Thats no reason NOT to do it however, especially since we’ve already said as a matter of tax law that its proper to lavish an equal amount of our collective money on the wealthy and corporations.
NOT forgiving these loans while leaving that tax cut on the books is immoral as the day is long.Report
It’s nonsense on stilts. If you’re talking about throwing away the kind of money the GOP threw away then at the very minimum you should be throwing it away on the needy and students with college debt, many of whom are assured to go on to be the best paid people in the country, are far from being even in the top ten of needy people in this country. You’re literally talking about transferring debt from the wealthy or soon to be wealthy and imposing it on everyone else including all the non-wealthy. I can understand why twitter- overwhelmingly populated by highly educated and wealthy educated youngsters- would be all for it but you’re an avowed socialist.
Your policy takes money away from the poorest demographics of people in the country (among others) and gives it to the wealthiest one. And your only justification is “The GOP did it first!”Report
And how exactly do you think the 2017 tax cuts worked? We transferred everyone else’s money to the wealthy . . . . I’m just taking that transfer and using it for what I consider a much much better social purpose.Report
Uh yeah and the 2017 tax cuts were terrible policy and we shouldn’t be making terrible policy choices like that!Report
Or to make a different argument-reverse the Republican tax cuts and apply the money to debt relief.Report
That would be at least somewhat better.Report
That’s funny. You know any Democrats willing to actually support reversing that thing? I mean Biden proposed less then that to pay for BBB and we see where that is right?Report
I can count a lot of Democrats who would do that, but they don’t add up to 218/50.Report
Your “moral” argument is a disgrace but this part I actually have quite a bit of sympathy for.
For students who are likely to do well in a legitimate college it is in our national and economic interest to make college much less cost prohibitive that it is now (as well as to implement radical reform of college curriculum and student life).Report
It doesn’t seem terribly complex to me.
The solution on offer is to just wipe away the existing debt without addressing any of the issues that caused it in the first place.
That means it’ll happen again- and probably very quickly. It’s also unambiguous that it’s a regressive policy- applying to everyone debt that is predominantly owed by wealthy debtors or debtors who have a high potential to become wealthy.
So it’s a temporary fix and an income transfer to a modest number of lower income people and a much larger number of wealthy or soon to be wealthy people and also a massive boon to University Admins who’re up there with CEO’s and sports team franchises in the categories of parasitic organizations that make life worse.
Finally it’s an inflationary policy in a time of high inflation. Not a good idea economically.
So morally and economically the policy being proposed seems pretty open and shut as a bad idea.Report
The majority of college students are not wealthy anymore. Get that idea out of your head. Most student debt is held by first-gens who attended dubious tech/vocational programs of limited utility and merit.Report
I question your math. The most student debt you hear about is those poor people who got conned by shady programs. But dollars and numbers wise the majority remains with advanced degree holders- aka wealthy or soon to be wealthy individuals.
“The report concludes that majority of student loan debt is held in households that have higher earnings and a graduate degree. ”
The highest-income 40% of households (those with incomes above $74,000) owe almost 60% of student loan debt. These borrowers make almost three-quarters of student loan payments.”
https://www.savingforcollege.com/article/who-owes-the-most-student-loan-debt#:~:text=The%20report%20concludes%20that%20majority,quarters%20of%20student%20loan%20payments.Report
Exactly:
https://www.brookings.edu/policy2020/votervital/who-owes-all-that-student-debt-and-whod-benefit-if-it-were-forgiven/Report
I question your math.
“The report concludes that majority of student loan debt is held in households that have higher earnings and a graduate degree.
The highest-income 40% of households (those with incomes above $74,000) owe almost 60% of student loan debt. These borrowers make almost three-quarters of student loan payments.”
https://www.savingforcollege.com/article/who-owes-the-most-student-loan-debt#:~:text=The%20report%20concludes%20that%20majority,quarters%20of%20student%20loan%20payments.RReport
You gotta parse that claim better. You can’t just say “Most” without providing a citation.
Here’s the questions I would ask:
-What schools have graduates with the highest debt?
-Of those schools, what is the mean/median income of graduates at 5 -10 – 20 years post graduation?
-What is the debt to school cost ratio? (4 years of tuition, fees, and housing cost $X, students has $Y debt).
-How many graduates who struggle to repay loans are living in expensive places? (Life choices matter, folks)Report
Nothing is being reinstituted AFAIK. It exists already under the status quo.Report
That was my sense and yet I rarely see either point address by advocates.Report
Cancelling student debt will help lower income students and debtors modestly. It’ll help wealthy advanced degree owners greatly and it’ll benefit enormously well paid university Presidents and their sprawling administrative university empires incalculably.
I wouldn’t say it’s as regressive a policy as, say, the GOP’s tax cuts but it’s in the same league of giveaways to the wealthy.
Since what’s being considered completely ignores the University and educational dysfunction that spawned the problem in the first place it might even be worse policy though. I also doubt it’d help at all politically either.Report
It depends on the amount of debt being forgiven. InMD is correct that everyone has their own morality tale here and refuses to let it go. That being said, universal programs are supposed to be universal. Means testing is fine and dandy to a point but I think we get caught up in it. The number of millennials and Gen Zs with college educations is much higher than previous generations and this is clearly a big issue for them. I don’t think all of them or many of them come from wealthy backgrounds. According to a story in the times today, many are working service jobs despite their college educations (which are not in puppetry generally), and feelings of anger about lectures from Old Economy Steve.
The it helps the wealthy line feels stuck in the 1990s.Report
The devil is in the details but if they means test it and limit it to the most low income borrowers and only a set amount of money then the whining and complaining from the left will be the same as if they didn’t do anything at all. Regardless, any amount they forgive is being offered with no policy changes to prevent the practices and behavior that caused the debt problem in the first place so it’ll happen again, and more quickly now that lenders and borrowers know they’ll get bailed out.
And regardless it helps the wealthy. Wealthy University administrators; wealthy loan providers and wealthy or soon to be wealthy student borrowers. Far more than it helps the poor borrowers. The math is the same as the GOP tax cuts. Dollars for the poor, thousands for the upper class and millions for the wealthy. If you’re in favor of this there’s no logical reason for you to oppose the tax cuts.Report
Also defining wealthy here has a bit of defining deviancy down. Even if someone comes from family where his or her parents earn six figures, said person might have to take out loans for the cost of tuition and living expenses. I agree with InMD that something needs to be done about the cost of college but my solution would probably be denounced as wild-eyed socialism. People might also be alienated from their families for various reasons.Report
All well and good but it doesn’t change the fact that student debt forgiveness is student debt transfer- from student debtors who have, as a class generally, higher income or future income potential to everyone. It’s fundamentally regressive. This isn’t ambiguous Saul, no matter how many sympathetic scenarios and examples we cherry pick out of the population of student debtors.Report
One of the safety valves that I think would be useful to consider in a larger reform package would be some sort of forgiveness of whatever is left after a multiple of original principal has been paid back, regardless of how much of it went to interest. Add whatever other strings you need but I think this would take a lot of pain out of the issue Saul raises. Maybe there’s also some timers in play.
Either way we should account for the point that these things evolve from repaying what you took out to a windfall for the lender that the debtor may or may not ever get out of.Report
I’m on board with all that. I’m not opposed to a large reform package. But a large reform package is not what is on offer.Report
Oh I know. All we have now is a combination of moral hazard and petty questionable politics going into the midterms.Report
If it helps the wealthy, the R side of the aisle ought to be all over this.Report
Not the right kind of wealthy I’m pretty sure, particularly in an age where education level is a significant partisan divide.Report
In fact, while this article is kind of asinine in the way most articles on ‘Millenials’ are, I think it is good insight into the politics of the question.
https://www.businessinsider.com/what-is-a-henry-millennials-earning-six-figures-feel-broke-2019-11Report
“Cancelling student debt will help lower income students and debtors modestly. It’ll help wealthy advanced degree owners greatly and it’ll benefit enormously well paid university Presidents and their sprawling administrative university empires incalculably.”
So?
Lower-income students and debtors aren’t the ones getting locked out of buying houses and having kids because of an Immense Pile Of Debt. They weren’t going to be buying houses anyway, and for most people making median-or-lower wages having kids is not a decision where economics is a factor.
If the idea is to alter demographic-economy future and have enough kids to still exist as a country two generations from now then yes, you should absolutely be helping Higher-Income Advanced Degree Holders, because those are the people who are not having kids, and they aren’t having kids because they can’t buy a house, and they can’t buy a house because they can’t save for a down payment, and they can’t save for a down payment because all their free cash goes to their student loans in a desperate attempt to stay ahead of the late-payment penalties.
“well that just sounds like a giveaway to the rich” do not make the mistake of confusing income with wealth, sir, they are not the same thing.
“well that just sounds like you’re worried about the Brown Tide” no, I’m worried that the concept for our social organization, that the elder are supported in their care by the work of the younger, depends on there being enough younger people to do that work, and right now it really looks like there won’t be, and there’s a big chunk of the nation who could be having kids but aren’t, and there’s a big single reason for that, and maybe that’s something we ought to do something about, no matter what our books-must-balance Abuser Morality says people deserve.Report
You and I agree here, even if we arrived at that agreement for different reasons.Report
I’m pretty much entirely and completely indifferent to demographic fretting and baby scares. So the idea we should lavish money on advanced degree holders (and indirectly flush billions right back into the University Administration Ratholes that created these debts in the fist place) in hopes that said degree holders will have more babies is not remotely persuasive to me.
The US is one of the destinations of choice across the world for immigrants of all education levels. If we run into a dearth of workers for any education level we can import them. If we want people to have more kids I think that argument would have to be made on its own and policies tailored specifically to that cause- not as a dubious knock on effect for shovelling money into the laps of advanced degree holders.Report
The stronger version of this argument IMO isn’t really about demographics but about a consumption driven economy. At a certain point you want your middle to upper middle class having disposable income because unlike the supply side class they spend it. Having them all spending decades handing over cash to creditors is really ‘dead’ money, being sucked out of the economy that could be better distributed in exchange for goods and services.
Of course an inflationary situation as we happen to be in today is most certainly not the time to do that.Report
Also, it creates a weird cascade of bad policies.
That is, we have housing issues that need a consensus on how to allow for new starts, zoning changes, and still need to be mindful of people’s investments and neighborhood characters. Which is why both YIMBY and NIMBY are wrong… but you don’t ‘solve’ housing issues with Debt Relief for College. That just increases Housing costs *and* increases College Costs.
Same with family formation… there are policies we could pursue, and, ironically one of the downstream policies is getting education costs under control… which erasing College Debt makes worse.
So lots of things go into family/housing/education policies – and none of them start with debt forgiveness. And, arguably, *all* are made worse by it. It’s the end-nuclear power to fight climate change strategy.Report
Personally I think the window of time when much sympathy could be offered for NIMBY shibboleths like neighborhood character or their housing investments is long, long since past.Report
I don’t think so… character/investment are the same thing. We’re no where near people giving up on their investments.
What I think we’re past is a Republican party that won’t ever spend money on ‘social programs’ … addressing housing and families and education are social programs that have new paradigms to offer.
So, for example, recognizing value in property as part of a modified Georgist (reverse Georgist) type of revision to looking at zoning and property and allocating Govt. dollars in reverse taxation is something that hasn’t happened, but potentially could — that is, if we’re going to start throwing $1.5T around, that’s a small first step towards alleviating housing starts.
The YIMBY position was too doctrinaire to be useful in any meaningful sense.Report
I’d argue that the phenomena of people’s only “investment” being the home they are paying a mortgage on is, itself, at least partially an artifact of the housing supply problem in the big housing markets of this country.
I’d agree we seem to past the phase of the GOP’s where they are overtly (g)libertarian in word and deed. Though since the GOP remains mired in a zombie (g)libertarian phase now that doesn’t say a lot. Perhaps it’s now unlikely the zombie GOP will have the political will to take direct runs at existing safety net programs but I wouldn’t hold my breath as what few policy impulses they seem to have still remain dominated by their libertarian-controlled elite. The idea that our current zombie GOP has the internal political coherence to propose new programs beyond tax cuts strikes me as ludicrously over determined.
The YIMBY position strikes me as quite malleable- make whatever policy changes are necessary to defang the ability of NIMBY’s to block housing everywhere. Whether that be by axing the environmental review in Cali, moving zoning decisions to the state level or something else- great!
Waiting for a wholesale overhaul of property taxation is not really something housing policy in those markets can afford to do.Report
I’m not convinced they get it either. They noticed about 40 years ago that for a bunch of cultural reasons, where continental Europeans like a check in the mail, Americans prefer a tax cut/credit.
This was fine when America was both rich and cheap. Maybe Mitt Romney is starting to kind of get it but by and large the GOP is still totally confused on how to navigate an America that is still very rich but also really expensive in some important ways.Report
Agreed. For decades now it’s been a GOP run by the low tax elite consensus constantly trying to figure out how to keep enough of the rubes voting for them to get into/stay in office by dangling various shiny objects as distractions. Trump rocked the applecart mightily hard but he didn’t overturn it and during his administration they continued their normal cut taxes playbook. I’ll believe that’s changed when I see it and not before.Report
Ok, I didn’t put that well… but you guys are somewhat willfully misreading my comment. I’m not suggesting that the Republican Party will lead on *any* meaningful policy reform. That party is done broke.
My point is that *if* we had a policy shift in discussion that began to focus on mitigating the financial concerns of property owners such that housing policies could change … there would be less ‘glibertarian’ resistance to using govt. funds as part of the solution.
I don’t mean to imply that the R’s will simply do this, nor do I think that bad Dem ideas are less bad and should be the default in the absence of a shift by either party.Report
You were around for Rick Santelli’s rant which kickstarted the Tea Party?
That lazy people bought houses they couldn’t afford and now we’re getting a handout?
I know what you’re saying, but what I’m saying is that the desire to hurt someone, to Make Them Pay undergirds every Republican campaign right now.
People like JD Vance are out there talking about shiftless poors buying TBone steaks with welfare money.
Any sort of hint of a program that doesn’t say “Whites Only” is going to run into a buzzsaw of hostility from Tucker Carlson, the thoughtleader of the GOP.Report
Trumpism is a lot of weird things, but Tea Party it ain’t.
Honestly Chip, at some point the ‘any stick to beat the dog’ approach to politics is boring… especially to someone who doesn’t care about the dog.Report
It’s one stick and a non-existent dog.Report
It’s, literally the same G-D people.
Every person who went to a Tea Party protest voted Trump.
And Trumpism isn’t “weird” at all.
It’s the Tea Party,the Birchers, the Klan, the Bund, the Know Nothings, the Confederates, the Royalists.
They are repeating verbatim the welfare queens and T-bone steaks routine, the Great Replacement routine, the Dearth Of White Babies routine which go back a century or more.
It’s that same strain of ethnic chauvinism and anti-democratic impulse which always existed in America.
There’s nothing new or hard to understand about it.Report
“It’s the Tea Party,the Birchers, the Klan, the Bund, the Know Nothings, the Confederates, the Royalists”
“The Rand Corporation, in conjunction with the saucer people, under the supervision of the reverse vampires, are forcing our parents to go to bed early in a fiendish plot to eliminate the meal of dinner.”Report
We’re through the looking glass here, people…Report
What’s weird is that if you describe the actual, factually correct history of America, people react with violent disbelief.Report
Actual history or the history Nikole Hannah Jones makes up in her spare time?Report
The one that includes the Tulsa Massacre, eugenics, and the Indian Schools.Report
Oh, and the one that includes a nationwide abortion ban.Report
if gluing a bucket of “groups i don’t like together, including some actual terrorists, spanning at least a century and a half” is “actual, factually correct history” then, i mean, i guess you’ve won? i can’t repel firepower of that dinesh d’souza-tude.Report
I never went to a Tea Party rally, but I supported a lot of their candidates, and I didn’t support Trump. In the 2016 primaries the Tea Party crowd preferred Cruz, Rubio, and Cain. A lot of Trump’s support in that primary came from disaffected non-Republicans. A lot of the Tea Partiers became never-Trumpers because he pushed an expansive social safety net and never understood the danger of debt.
A lot of evangelicals supported Trump, particularly as his term went on, because of his judicial nominations. The evangelical movement was always Tea Party adjacent. They were more inclined toward social spending.
You’ll find a significant number of Tea Party types also had strong Occupy vibes. Remember the Tea Party didn’t start out with any party affiliation. And a good number of Trump supporters had also voted for Obama.
Just a few of the differences off the top of my head.Report
And every Cruz, Cain, and Jeb supporter is now a Trumpist, except for the small splinter group of Never Trumpers.
The edges of party affiliation are always fuzzy but the core of Trumpism is just the same people who have long voted Republicans since the Southern Strategy.
I know there’s a powerful desire to pretend that the guy who commands support of 85% of the party is just some minor fringe figure, but c’mon.Report
Ok, thanks for clarifying. Perhaps I misread you but I assure you it wasn’t willful.
My fear is simply that the GOP both can’t and won’t offer such policy changes- as you said they’re just not capable; and that if Dems tried to propose them the right would oppose them simply by virtue of their originating from Dems- though if they involve gummint money too I imagine the elites on the right would be pleased with this outcome.Report
Certainly no intention to misread! I’m just waiting for the pivot that doesn’t seem to come but I’m certainly open to evidence it’s happening and I’m missing it.Report
Is our policy wonks learning?
If I simplify it even further to just get at the kernel of the point I failed to make it’s this:
If we were to propose various programs (don’t call them welfare or social spending) that used Govt. funds to offset possible losses to lower/middle/upper-middle classes, there’s no longer a significant constituency that would object to the idea of giving money to these people on Principled Political/Economic Philosophy that Govt doesn’t do things like that.
Probably we’re closer to objecting to spending the money over *there* and not over *yonder* … but that’s just a matter of who arrives at a destination that’s closer to here, first.Report
Which wonks? And don’t get me wrong, I can see your point that it’s probably no longer going to alienate anyone in the conservative coalition in a way that matters from an electoral perspective like maybe it once would have. But I’m also trying to square it with the recent Rick Scott debacle, unless maybe the immediate repudiation is its own sign. What I’d really be looking for is someone influential in office or the conservative newstainment complex that gets there through something other than blind luck (Trump) or nihilism (Tucker Carlson). Until that happens I don’t think there will be enough policy movement to treat it as a real force. That’s what happens when no one actually believes in what they say and are just in it for crowd approval.
And if I need to concede that the push for forgiveness at issue in the OP is representative of a certain left of center nihilism I can do that, cheerfully even. I think that’s ultimately how the Biden admin is going to treat it even though they can’t say as much.Report
Just to put a finer point on it what I’m asking is where the real live American Red Toryism is, like our version of what they’ve pitched in the UK to significant electoral success? I understand the jury is still very much out on the long term prospects over there but it’s well passed the point of pure theory.Report
I think Trump stumped any Red Tory project before it got started. The incoherency of Trump is less about what R’s will do, but about what R’s don’t care about any more.
I think there’s tremendous opportunity to exploit the gaps between the parties… except for the electoral problem of first past the post.
So, probably we’re stuck with two bad parties until someone dies, something breaks or somewhere else intervenes.Report
“What I think we’re past is a Republican party that won’t ever spend money on ‘social programs’ ”
You may as well wait for Godot, or the Great Pumpkin, or the dog to give the pirates the keys.
Ethnic tribalism demands punishment of the Outgroup, not rewards, not even to the Ingroup.
So we will get a ban on abortion, but no child welfare programs. Drug tests for assistance, but no drug treatment programs. Transient laws to throw homeless people into jails, but not shelters. School choice to punish underperforming schools, because pain and suffering is the only way they will be incented to improve.
And if people can’t afford their homes, its proof that banks are being too lenient with underwriting, and so a repeal of the CRA.Report
We already have this in Mississippi where both the governor and the legislature’s political leadership are steadfastly refusing to expand Medicaid in the poorest state in the nation.Report
Sure, but if you don’t pair debt relief with accountability for the education industry that caused the mess in the first place then you’re just fixing for an even bigger crisis down the road because students will borrow, financiers will finance and the educational admins will charge with abandon in confidence that the feds will bail them out again.
And, as you noted, the last thing you wanna do with inflation galloping around is pour more money into the spending classes laps.Report
Yes. I would actually compare the case against loan forgiveness to the case against up front amnesty for illegal immigration. It’s something you potentially do at the end of a reform cycle as a one time clean-up of the mess the failed policy left behind. But it isn’t a solution in itself.Report
It’s going to be tough to square the electoral politics of whatever forgiveness is being clamored for and the complete lack of will to do something legislatively about the problem. One side wants what it was promised, and the other side doesn’t give a flying fish.
If the solution lies with Congress acting, then it’s a dead letter.Report
It certainly could appear that way now, but it doesn’t have to appear that way or be that way for all time.
This is a big reason why I tend to cheerlead for Republicans as much as I do. It’s not so much that the Republicans will do good things but the Demos will do not so good things (though that is true for the most part).
At least as important as that and probably more, by voting in office enough Republicans in 2022 and 2024 we can create a strong enough political culture to handle things like student debt in ways that in earlier times would be described as bipartisan.
That is, we can actually talk with each other and hash some things out instead of defensively retreating to factional fortifications.
We don’t have to be held hostage to neurotic Chip-and-Saul-ism. And for those who are worried about such things, large GOP majorities also disempower fringe-Right politics as well.
This is one reason why I tend to like the direction the DeSantis is taking the Republicans. As things stand, it’s hard for a lot of people to imagine that a positive, communitarian politics, is really possible. But it is.Report
Envisioning a technocratic Republican party in the year of our Lord MMXXII is a bit difficult for me. Honestly, it’s an experiment that this voter is not willing to try.
Wouldn’t the solution you envision be workable no matter who’s in power, and whatever makeup of Congress (assuming rational actors)?Report
No, it’s mostly about the margin of victory of the Republican majority, to create futility for a certain sort of libs, and a certain sort of “centrist” too for that matter.
Eg, you see that in the way that certain members of the Establishment have been falling over themselves in fundraising for Liz Cheney.
Instead, you can have a world where the center-Right America and its demographic majority combined with the Republicans in Congress and their partisan majorities are immovable objects, so there’s no percentage in trying to move them.
So instead, they must be engaged instead, toward the national interest, in particular generationally.
Similarly from the Right, there’s no percentage in trying to own the libs when the libs are already owned.
It will in practice be very difficult to reestablish the bounds of accountability from the Establishment to the voters, but to be honest I think the worst is over and a lot of it is already done. But once it is done, we have the possibility that our politics will look much different, and much better, than it does today.Report
Positive and communitarian.Report
That’s right, positive and communitarian.
We’re not likely to see positive and communitarian politics if Trump is dominating the Republican party. But guess what, Trump isn’t dominating the Republican party, and his influence is dissipating further every day. And we don’t have to invest ourselves in cosplay, cute nicknames, and theatrics any more.Report
Trump leads ever poll for 2024 nominee. The RNC is still paying all of his bills. Barring the occasional outcast like Cheney or Romney, no GOP officials dare to say a word against him. The GOP is his party as long as he lives. Maybe longer.Report
No no. The people who are saying this basically aren’t paying attention to anything that’s happened since Jan ^ really.
I’ll find a link if I need to, but there was a poll of Republicans, or rather a series of polls of Republicans asking whether they viewed themselves as party supporters or Trump supporters. And party supporters has gained like 30 points relative to Trump supporters over the last six months or whatever.
Even Trump’s endorsements aren’t worth very much, in Georgia, Alabama or Ohio, which are very Trumpy states in the party.Report
We’ll have to see how JD Mandel does in the primary.Report
Trump’s endorsement is what won it fir Vance.Report
“The US is one of the destinations of choice across the world for immigrants of all education levels.”
um.
“we don’t care about the troubles of our existing middle class because there’s plenty of fobbies to take over” is a hell of a take, sir
“If we want people to have more kids I think that argument would have to be made on its own…”
that’s literally the argument I just made along with an explanation of why they aren’t already doing it but apparently you want the BAD RICH WOKIES to GET what they DESERVEReport
My great grandparents were fobbies, and FYI we DID take over.Report
We’re not talking about middle class if we’re talking about paying off the student loans of people with high level degrees. We’re talking giving money to people with pretty much the highest earnings potential in the country and doing so by taking it from poor people with the lowest earnings potential.
And we’re not talking about natalist policy. We’re talking about student debt and you’re just trying to bolt a natalist argument onto the side of it by saying “Maybe if we sluice money into the laps of these college graduates, they’ll have more babies.” Since I don’t care if they have more babies or not that argument leaves me unmoved. Likewise if you’d said “Maybe if we sluice money into the laps of these college graduates, they’ll buy more Teslas.” I’d remain unmoved because I don’t care if college graduates buy more Teslas or not.
As for rich wokies, I don’t recall commenting about them at all.Report
I question your math.
“The report concludes that majority of student loan debt is held in households that have higher earnings and a graduate degree.
The highest-income 40% of households (those with incomes above $74,000) owe almost 60% of student loan debt. These borrowers make almost three-quarters of student loan payments.”
https://www.savingforcollege.com/article/who-owes-the-most-student-loan-debt#:~:text=The%20report%20concludes%20that%20majority,quarters%20of%20student%20loan%20payments.Report
So here’s a fun fact: You know how college tuition is skyrocketing, growing much faster than the overall rate of inflation? It’s not true! Take a look at pages 18 and 19 in the College Board’s “Trends in College Pricing and Student Aid” report here (PDF).
At public four-year universities, average tuition and fees net of grants was $2,640 per year. At private universities it was $14,990. Adjusted for overall inflation, both of these numbers have declined over the past 15 years. While it is (to the best of my knowledge) true that the price paid for college by students from wealthy families has been rapidly increasing, the price paid by the average student has not even kept up with inflation.
Similarly, average loan balance at graduation is up about 10% over the past 15 years, but flat over the past 10, and actually down from five years ago (see page 43, ibid.).
I was aware that grants were offsetting some of the cost of rising tuition, but I hadn’t realized until now that they had more than completely canceled out the last 15 years of tuition increases.Report
I suspect that what’s happening here is that the price of a four-year degree is pretty much universally, “How much you got?” For most students, the answer is, “Well, the federal government will lend me up to a total $31,000 spread out over the whole four years,” and then that’s what they end up paying.
So for students whose parents have money, prices can keep going up, but that limit on federal lending puts a pretty hard ceiling on net cost of attendance for everyone else. If universities don’t knock the price down to the point where that $31,000 will cover all four years, then the rich kids are the only ones they’ll be getting any money from, and there just aren’t enough of those to go around.
But that’s just what I’m inferring from the statistics. Maybe dhex or fillyjonk might have more insight into the facts on the ground.Report
oh hai
“I suspect that what’s happening here is that the price of a four-year degree is pretty much universally, “How much you got?””
not really, no. there’s a whole lotta options out there. not as many as india, say, but at least 4,200 ish options.
what’s important to note is something called a “discount rate” – it’s the gap between how much tuition on paper is and what the average institutional aid is. it’s a measure of how much an institution discounts against all tuition charged, and fits into net tuition revenue (NTR) targets, which is the amount of tuition collected in a given year.
there are a huge number of factors which go into this number. it’s very individual to an institution and often complicated. like the costs of building maintenance, there’s a point at which large institutions can yolo away and the vast majority of the others cannot – and this is where a great deal of the budget crunching is going to come from COUPLED with declining enrollments due to declining birth rates. the vast majority of institutions, from the bottom to the middle, have many tougher rows to hoe, but the media generally focuses on the big 10 or so, despite them graduating .001% or whatever of the degree holding population.
most fin aid counselors/directors aren’t in the business of just packaging anyone, because if a student drops out by the second year (representing some of core financial penalties to the institution for non-completion/non-retention in terms of revenue lost via recruitment costs) these things eventually come back to the admissions office on the “why are you admitting lousy students?” train. that train sucks.
it’s why they spend many hours with students and families explaining “this is the merit aid, this is the need-based aid, and this is the remainder. we’ve also detailed several loan options, here’s the ups and downs to each of them”.
to avoid that train/death spiral, there’s a lot of focus on both selecting and retaining “college ready” students (this is a term with a lot of wiggle room). one way to avoid that is to give more “merit aid” to stronger students who have shown more interest and have a better app, even if those students have a greater EFC (expected family contribution) than your class average, there’s some degree of leverage if other institutions are packaging the student more generously, and so on. this allows you to balance the mixture of your recruited class, keep certain metrics (like HS gpa, etc) higher than you normally would have, at the cost of using up more of your aid budget to recruit stronger students v. weaker ones.
this does not necessarily work out in favor of every low-income family out there, oddly enough, all of the conservative fixation on “affirmative action” aside. it’s just not how it works, nor how could it work at the vast, vast, vast majority of institutions which don’t have money to burn. and i generally find most takes (regardless of political beliefs) about college admissions and student debt to be, at best, weakly informed.
i don’t have a personal position on debt forgiveness beyond some kind of means testing, if only for the ability to demonstrate “fairness” in public conditions. i’m a first gen pell student who selected my (private) undergraduate institution based on how much money they gave me (all of it!). i’m not going to crow about that because i had a deeply-ingrained, pathological fear of debt and acted accordingly, but it happened to serve me quite well in this case. (my MA was similarly nearly-free, for different reasons, but in neither case did i have family money to fall back on)
i find the rather regular narrative that students and their families generally don’t understand how loans and debt works to be, to put it charitably, aggressively condescending in many cases. not in every case, because there are scumbags and desperate institutions who are willing to burn tomorrow for a few drops of mana today. and there are increasing amounts of families like mine, acting without any context from which to work…but who knew how to use a calculator and understood the concept of interest. i didn’t have a ton of options, but if all else failed i would have gone to a state school and gotten some money back each year bc of state grants for lower-income families at the time.
but that narrative also sidesteps the culpability of parents of upper middle and high income students, who most certainly understand and simultaneously carry a healthy slice of the student debt we’re talking about – which is, in my less charitable view, why so many journalists get fixated on it. they’re generally from upper mid to high income families, so they see a glimmer of recognition and work from there. not everyone, but a lot of writers.
thanks for coming to my tedx talk, cause regular ted don’t love me.Report
Looks like JD Vance is thinking along the same vein as some of y’all.
https://twitter.com/daveweigel/status/1520150759685464066?s=20&t=YMePdJxFyLYcBUSWzbW-ZgReport
“Looks like JD Vance is thinking along the same vein as some of y’all.”
A sentence which should cause a person to do some deep soul searching and thinking about the life choices which may have led them to such a place.Report
Agreed, but a stopped clock is right twice a day.Report
Also from Vance:
https://www.rawstory.com/jd-vance-fentanyl-ohio/
Report
I sure hope I don’t get hit by one of those fentanyl-tipped darts that are flying around everywhere.Report
They’re smart darts that only attack MAGAs.Report
nah, in this case he’s likely making up nonsense. if he said a community college with rolling admissions admitting a lot of people? sure…it’s literally their mission, coupled with their lower costs, etc.
but “fake scholarships”? meaning misrepresented loans? i’m not saying it’s impossible…just that it’s very unlikely to have happened that way. if it happened at all. it’s very canadian admissions counselor girlfriend-y. and admitting that level of unprepared student populations is shooting tomorrow in the back for the sake of making a single year’s numbers – and it would be very visible to anyone involved in the app review process, which is usually a blend of internal and external-to-admissions stakeholders. also your incoming class stats would take a dive, which is also not a great look.
also random admissions counselors don’t generally deal with financial aid directly, especially in an institution of any real size. they know about the parameters and can talk generally about options, but for specific questions if they’re not sending families with specific questions to the fin aid office they should probably get fired.
so i’m going out on a limb and saying jd vance is full of it.Report
Vance has worked very hard to earn a reputation as a person whose every utterance should be viewed with suspicion.
Like, are these the for-profit colleges which are corrupt, or the elite universities?
And what does it mean to “go at” them?
And who are these people who are being admitted knowing they will fail? Hillbillies? “Urban” people?
What does he want to do with them, kick them to the curb?
When your brand is “culture war”, you lose the assumption of benign intent.Report
I’m with you on Vance and normally find his statements to be a ways away from my thoughts on just about every matter.
Yeah, though, the comment about “stopped clock twice every day…”Report
Who knows if this is accurate, but if so, what a crazy proposal — sure, let’s help out those poor suffering grads only earning in the very low six figures, by forgiving them a month’s salary worth of their current debt.
It’s not enough to satisfy the people screaming the loudest, while also looking very much like a giveaway to the current or future upper middle class, plus also basically being more stimulus when inflation is soaring. Why would they even float this???Report
https://www.cnn.com/2022/04/29/opinions/student-debt-biden-hemmer/index.htmlReport
congratulations you invented Occupy Wall StreetReport