Unpopular Opinion - Student Loan Forgiveness
From the very get-go, something has rubbed me wrong about the plan to cancel student loan debt. At first it was the logical disconnect with which its advocates supported their position, but now I think its nefarious intentions are relying on people's selfishness to sneak through a massive money grab.
Shouldn't we first devise a plan for free higher education? If we forgive student loan debt without first providing for free college, tomorrow's enrolees will be incurring the exact same debt that we just eradicated. This is a bit of a red flag for me.
At this point I have to qualify what I mean by "free" college. State run universities should be free for in-state students. Choosing a college is one of the first adult choices many of us make in our lives, and some will choose to make a different investment in their future by attending a more prestigious school. That's on them.
In addition to free college, elimination of student loan debt should follow flexible repayment and zero interest loans as first steps toward a long term solution. The focus on loan forgiveness fails to address the root of the problem.
In ignoring the source of the problem, advocates have shifted the overton window to it becoming a matter of macroeconomics. '$1.8 Trillion in debt is a drag on the economy,' but so is mortgage debt, credit card debt, etc. It isn't the debt that got these people into financial trouble, it was the inability to repay the debt. We all know the average salary hasn't kept pace with the cost of living. Income disparity between the top 1% and bottom 99% grows ever wider.
When we talk about student loan forgiveness without a more comprehensive solution what we're primarily talking about is a massive capital injection into the economy, letting affordable college become a secondary concern.
Defenders of the plan have taken many tacks, but what I hear most say is the financial impact happened when the money was spent; repayment doesn't matter because the government can just print more money. Running up the national debt and debasing the dollar echoes the things I've heard from radical Libertarians who wish to bankrupt the USA and start anew.
The other argument I hear is this: Money that would have gone to repaying those loans will be injected into the economy through higher personal spending, and eventually returned to the government through taxes. This is the exact same benefit which would be achieved with free college. So I have to ask whether elevating everyone's standard of living is really the goal here.
The oversimplification of the economics behind the plan seems to be a way of disguising the money trail. When we "follow the money" it isn't transferred from a vague government coffer to the institutions of higher learning.
This capital injection coincides with peak corporate profits.
Nearly 100 of the biggest U.S. publicly traded companies booked 2021 profit margins that were at least 50 percent higher than their 2019 levels. [PBS News Hour]
It's been said that student loan debt prevents this generation from achieving home ownership. But housing supply is short, and some say prices are already in a bubble. Is the real estate market really in need of 43 million prospective buyers to be released from their biggest debt obligation?
If you're BlackRock Capital or any number of investment banks, the answer is yes. Ever since 2009, they have been purchasing homes as part of their portfolios, and now they need buyers onto whom they can unload their overprices assets.
Corporate investors snapped up 15 percent of U.S. homes for sale in the first quarter of 2021
They created a bidding war by paying more than the asking price, pushing the median home price in the U.S. up 37% in two years.
Every time the treasury gets pillaged it always takes the form of "socialize the costs, privatize the profits." I see no reason why the plan to forgive student loan debt would break this pattern.
Comments
The first step
should be to allow student loans to be written off with bankruptcies. Like virtually all other debts.
A money grab
that might actually benefit the hoi polloi in some way? Sacrelige.
Money grabs can only benefit the corporations and oligarchs, by definition. It's the Amurkin Way.
Let's also face it: it is never going to happen, for exactly that reason. So you needn't worry too much. A thing that will never happen is not a thing. It is a distraction.
Twice bitten, permanently shy.
Not my definition of "benefit"
Median home price has more than doubled (+112%)in the past 12 years since the banks started buying. Is loading the hoi poloi in at the top really a benefit to them? And the money isn't going to them, it's encouraging them to take on new debt so they can give their money to the corporations and oligarchs.
“He may not have gotten the words out but the thoughts were great.”
True enough,
I suppose. I do not share the idea that all of that relief money would go instantly to the banks to buy real estate, however.
Given the extremely sad state of finances for many of my millenial acquaintances (yes, I do have some, despite being a 60-something), I believe that a significant fraction of that would be used for other purposes- such as medical debt, avoiding outright bankruptcy, and so on. I don't think that the model of "it will go immediately to the oligarchs" is quite accurate.
If I were to restate the question along my lines of thinking, it would be "would I rather see $70bn go straight to the MIC as part of the infinite war budget, or would I rather see it split up to dwell for some period in the pockets of the hoi polloi, and used as they need?"
I have no problem advocating for the latter. Yes, I'm exquisitely aware that it will all end up in the pockets of the oligarchy eventually in any case- that die has been cast, and it is how the world works now. I can't change that. It's what happens with it in the interim that matters more to me.
Just for what it is worth, the millenials I know aren't any more interested in buying into the real estate roulette than I am. I lost my ass on it in the early teens, and am officially out of the business of feeding the sharks.
The whole discussion is moot, though, because as I pointed out: it isn't going to happen. The oligarchs and MIC will never let that money go to the "useless eaters". We are discussing a distraction here, and nothing more. We might as well be rehashing how many angels can dance on the head of the pin- that's also always good for a laugh, and an argument.
Twice bitten, permanently shy.
Sorry, bondibox is right
Paying someone's student loans so that he can himself pay off his medical debt is rewarding the college that price gouged him on his tuition AND rewarding the hospital that price gouged him as well.
On to Biden since 1973
@usefewersyllables Three. Exactly three
Three. Exactly three angels can dance on the head of a pin. For the same reason it takes three licks to get to the center of a tootsie pop.
I dunno
If the feds can give the banks well over $50 trillion I think there’s money for student loan cancellation. Some people who have been paying their loans for years and years still owe more money than they originally borrowed. I see no reason why both options can’t be done. Also maybe congress should quit giving trillions to the rich just so they can buy up homes for pennies on the dollar. Medical debt needs to be addressed too. My $.02.
There were problems with running a campaign of Joy while committing a genocide? Who could have guessed?
Harris is unburdened of speaking going forward.
As a previous Indiana resident
I was interested in some history.
What I found was that the IN constitution of 1816 specified that public education would be provided (subject to racial/gender limitations) to citizens through the collegiate level at state supported schools. This was amended in 1972 to strike down that provision.
Please note the date.
California had a similar treatment of public collegiate education. This was removed during that same period in the interests of austerity.
In order to correct the situation it would be necessary to reverse the neolib/neocon/etc financial capitalism coup in this country. Education is like just about every other social benefit that can be privatized for profit purposes and has been.
We don't have a college debt problem... we have a finance capitalism problem.
BTW tho it deviates a bit from the subject, I totally agree with the people who oppose the Bologna system of higher education. In effect that system is being applied in quite a few countries, especially the EU member states. It further codifies the financialization and deliberate uneducation of the non-elites in the world political establishment.
Presumably people take on student loan debt
so they can get degrees and thus better jobs. These days many of the better jobs are often not all that well-paying, because commodities like health care, education, and real estate have experienced inflation vastly in excess of wage inflation. Thus calls for student loan forgiveness.
There are two phenomena associated with the conversion of the college diploma into a mere ticket to a better job:
1) Tuition hikes have allowed college administrators to soak up a lot of student money and thus made the diplomas very costly
2) The actual content of college has either shriveled to nothing or replaced job training. You have degree programs being phased out right and left because "there's no money for them."
Student loan forgiveness is one attempt to deal with a symptom of the normal operation of capitalism in its terminal, neoliberal phase. The universities were transformed from what they were in an earlier era -- essentially Bible schools -- because more complex corporate organizations in the late 19th century needed more skilled workers. Now they just generate tons of debt because commerce has become cutthroat (in relation to what it was in capitalism's Golden Age) and the super-rich are getting super-richer while the rest of us ponder the limited options for bankruptcy made meager by -- you guessed it -- Joe Biden.
It is time, now in the 21st century, for the university to deal with the fact that capitalism isn't going to last forever and to prepare its curriculum accordingly.
“When there's no fight over programme, the election becomes a casting exercise. Trump's win is the unstoppable consequence of this situation.” - Jean-Luc Melanchon
Exactly this
While ignoring the disease.
“He may not have gotten the words out but the thoughts were great.”
We can start on the disease --
-- by putting forth plans for a transition out of the capitalist system.
What did you have in mind?
(hint: they treat the symptoms because they don't have such plans.)
“When there's no fight over programme, the election becomes a casting exercise. Trump's win is the unstoppable consequence of this situation.” - Jean-Luc Melanchon
The first step
is to raise the minimum wage. Then single payer healthcare, transition to clean energy with massive investments in high speed rail and public transportation. Eliminating feudal capitalism won't actually come until we redefine our role in the world and stop spending trillions on endless wars which prop up the dollar as the world's reserve currency. Nearly every single war we've been in recently has been in response to them selling their oil for something other than dollars.
“He may not have gotten the words out but the thoughts were great.”
Your conditions for change are actually
...the same as the conditions that must be met and scaled up for the survival of the species.
Neoliberals assume the coming crisis will only wipe out the billions of poor people around the world, who do not possess the resources to survive. Once the excess people are gone, the world will become a paradise for the well-to-do. They also assume that the human lifespan, for some, will be greatly increased. The neoliberal paradise will be run as a single state, ruled globally, to benefit the objectives of the rulers and their chosen indispensable corporations.
But when I say, "survival of the species" I am talking about extinction of the entire species. Collectively, scientists put that extinction date at 2400 AD — assuming the necessary changes are not made almost immediately. (The necessary changes would require great sacrifice from everyone who is currently living above a sustainable level.) The century 2300 would be spent winding down. Slowly at first, and then, all at once.
IMAGINE if you woke up the day after a US Presidential Election and headlines around the the world blared, "The Majority of Americans Refused to Vote in US Presidential Election! What Does this Mean?"
Yeah I think we should do it
From MoA
Published the sequel today, "Overcoming Systemic Plunder". Within it I made a parenthetical note about the worthlessness of the dollar and linked to the most recent balance sheet published by the Treasury Department. When you look, do note the amount of negative equity. And in case you've forgotten or just don't know, the formula is Assets-Liabilities=Equity. Elsewhere in that overall report is the accumulated amount of all that negative equity, $123.5 Trillion. That's how much Neoliberalism has plundered from US citizens, so the rest of the world shouldn't feel too bad.
Posted by: karlof1 | Aug 17 2022 23:19 utc | 54
Not to mention all the trillions stolen from us for wars to take country’s resources making a few oil, defense and congress members tons of money while others outsourced their factories and jobs so CEOs could make obscene amounts of money. Anyone who doesn’t think that our government should spend money to help downtrodden people after all the theft is an empire apologist. IMO.
There were problems with running a campaign of Joy while committing a genocide? Who could have guessed?
Harris is unburdened of speaking going forward.
And if the serfs have anything left...
The D's just voted in 87,000 additional IRS agents should be able to mop up most of that...
If the US is ever to keep-up with the rest of the world
education and training must be underwritten by the government,
as it is in most other tech advanced states. Getting ahead by going into
deep debt for an uncertain future is another capitalist induced
american dream dangled in front of developing youth. Paid education
and training (not necessarily by major corporations) should be a
societal right. IMO
A complete and functional education has been a Human Right
...ratified by all nations of the world, over 70 years ago. Can you name any emerged and developed nations that do not provide a free and complete education to their citizens? Perhaps a few of those nations have been so thoroughly poisoned by neoliberalism that they have yanked that Human Right from their citizens, in order to more rapidly incarcerate (enslave) them and depopulate. The corporations in those nations can always import the talent they need from India, China, and other UN Member Nations that do provide that Human Right to citizens.
IMAGINE if you woke up the day after a US Presidential Election and headlines around the the world blared, "The Majority of Americans Refused to Vote in US Presidential Election! What Does this Mean?"
If the forgiveness occurred
today, the people who finished paying their loans off yesterday would riot in the streets. Those getting a loan tomorrow would also be in riot mode.
This is not a good solution, and it is unfair.
I agree state universities should be free.
I am hugely disappointed in the elimination of arts and humanities programs in favor of jobs programs degrees. It is not a waste of time to learn subjects you will take to your grave, if not to your workplace.
edit: spelling
"We'll know our disinformation program is complete when everything the American public believes is false." ---- William Casey, CIA Director, 1981
Ok, I can go along with humanities
but I draw the line at divinity schools.
Or vouchers for the crowd who don't want their children exposed to secular propaganda. Actually, vouchers for anything.
Oh, and sports.
Perhaps we might look into the absurd book fees also. And the way the "teacher" insists on the purchase of books that offer nothing contributing to the subject -- and that includes the ones they write.
And then there's the use of the indentured servitude of the TAs.
Oh wait, maybe we need some serious oversight over education that is financed by the public.
I am widja on divinity
schools, and vouchers, and books, and TAs. Add that college instructors are nowadays students swapping work for the costs of their masters degrees.
Whereas I have no use for, nor interest in sports, I confess that many athletes who qualify for sports scholarship would never be able to pay for college.
Yesterday, I won a ruling that a dad obtained custody of his daughter so she could go to a local high school known for putting poor graduating females (is that correct anymore?) into quality programs through baseball scholarships. That was her only way into college.
"We'll know our disinformation program is complete when everything the American public believes is false." ---- William Casey, CIA Director, 1981
The sports scholarship raises an interesting point
If the student is smart enough to go to college and has college costs subsidized by society, what need is there for the sports scholarship? Unless that sports business has nothing to do with education and more to do with the financialization of sports.
Free public education totally changes the "playing field", so to speak. A new universe.
How do gifted athletes expand beyond secondary education?
It is mainly by exposure and scouts. If that were not the case, the economically challenged
student athletes would not go beyond high school in developing their talents.
I agree it is a mainly a conduit, via funds provided by alumni, which may lead to financial
gains for the colleges if the gambles play out. This is why amateur sports are loosening
their restrictions on gifts to the players. It is not ideal. It is not state sponsored. But it does
extend the education of talented youth. And exposure to possible lucrative careers. An
exception may be noted that Kobe Bryant jumped from high school straight to the pro's.
Again, somebody is making money. It's the 'mericun way.
I am speaking of the benefit derived from sports scholarships
in the present system.
"We'll know our disinformation program is complete when everything the American public believes is false." ---- William Casey, CIA Director, 1981
Sports is the ultimate drain of college budgets
I'd do away with TEAM SPECTATOR sports in college, altogether. They are corrupt and they turn people's minds into imperialist, warmonger trash.
THE HIGHEST PAID PUBLIC EMPLOYEE IN EACH STATE
IMAGINE if you woke up the day after a US Presidential Election and headlines around the the world blared, "The Majority of Americans Refused to Vote in US Presidential Election! What Does this Mean?"
Cut the interest rate to zero
Cancel the penalties and accumulated interest. Make the loan total equal to the original amount borrowed. Payback the principle only.
As someone who did get Student Loan Forgiveness,
I believe that everyone should also get it. It took me two years of constantly filing and refiling to do so. The reason I requested it was because I was rear ended in an accident. It used to be automatic if you were approved for Social Security Disability, but Bush the younger changed that.
Even after being approved, I had to wait another three years before they were permanently discharged, just in case I won the lottery. And yes, that is what they told me.
It's all a scam
call it loan forgiveness, call it a UBI, call it a tax deduction or a credit or a subsidy, it's all a renaming of a way to give money to the 1% while claiming that it's going to everyone. Ultimately all that matters is where the money ends up, not how it gets there.
Always remember, inflation always happens, and can only happen, when the customers can and are willing - or can be forced - to pay.
On to Biden since 1973