I’m onboard with debt relief, but why is no one talking about addressing the systemic problems that got us to this point?
My kids went through college about 20 years ago. Three kids, three schools, thirteen years of FAFSAs and signing loans. And every year - EVERY YEAR - tuition and fees at each school increased more than the rate of inflation, cost of living, etc. Pick an indicator. The increase was greater. And it appears to me that hasn’t changed in the 20+ years since.
The schools have no reason to alter that. Nor do companies like Navient that do everything they can to squeeze every last dime out of each and every loan. They know parents and students will just suck it up and take on the loans and the hassles that go with paying them off.
I live in MA and have tried getting Warren to speak to it. Crickets.
Cancel the debt without fixing this, and 20 years from now this will still becan issue.
It seems to me it would be a political winner to address the systemic problems simultaneously.
He should do it. If R's threaten litigation, let them hang that albatross around their necks--another unpopular position for them to own.
Not only would this be a big announcement on its own, but he could use it to showcase/raise awareness of his other recent student aid proposals--raising Pell grant awards to $8,670 annually, support for HCBUs and Tribal colleges, $200m for "career connected high schools" that let kids earn college credit. This has gotten little attention but it should. It's another way to reduce college costs and thus future debt--addressing some of the "fairness" concerns about how cancelling student debt today does nothing to help future students.
These latest proposals rest with Congress, maybe a little pressure would help. A midterm issue that would help the D's.
Let’s say that today all student debt is cancelled. The class of 2026 then starts school in a few months. Tuition and fees haven’t changed. They will still need loans and grants to pay for school. So we start running up debt that we have just built an expectation will be forgiven at some point. What will change? Several things: More unprepared and uncommitted kids will take on college as a flier. Or just to have that “college experience”. Schools will increase the rate at which they charge tuition. There’s nothing magically ethical about schools—use hospitals as an example. The more generous insurance gets, the faster their prices go up. We have already seen that happen as student loans have been easier to get.
Schools and lenders don’t collude because they haven’t had to. Both groups were savvy enough to realize that the loan - tuition situation turned into a giant hog trough they could both feed from.
I realize students and their parents have been conned. I wish we could charge back a third of these loan balances to lenders, and a third to the schools, and let the students pay a third. Then everyone gets a lesson.
If I am a 20-something EMT, LPN, plumber, etc, who had to pay for my technical training myself, how pissed will I be at this?
Finally, imagine what would happen if the government paid off all credit card debt. Or gambling debt. Or mortgage debt. This simply can’t happen without fundamental reform of the processes that got us here.
I hate to be a downer, but cancelling student debt right now would be more than a bit tone deaf. Stick with me here...
Student loan debt impacts about 12.9% of the population. Significant, but far from a majority. Of those, about 40% (or 5% of the overall population) are in the ugly situation of having taken on the debt without ever earning a degree. Some percentage of those folks are being helped by the Biden administrations efforts to relieve those defrauded by for-profit colleges. The other 60% are, by and large, doing better - even with the loan debt - than those without a degree. Over their lifetimes they will do much better, earning almost 2x more.
So the soundbite net of that is: "most people with college debt are still doing better than average".
If Biden were to wave the executive wand and cancel $10k for everyone, it would be seen as essentially the same as handing $10k checks to a group of people who are already doing better than most (at least by the numbers). I can already hear Ted Cruz shouting, "Look! The democrat elites just gave ten grand to their own kids! What did they do for your kids?"
In normal times, that might wash out after a couple of cycles. With record inflation eating everyone's savings it would land and become yet another stupid talking point in the already inflamed education genre of culture war.
What Biden is doing now - programs to fix the broken aspects of the student loan system and turning off interest - is as good as it gets until the economy stabilizes and his numbers improve. Forgiveness (or better yet, greatly expanded opportunities to earn forgiveness by taking public sector and/or not-for-profit jobs) should wait until at least after the midterms, and more likely until a second term.
When this has come up during canvassing NAVs, I hear either strong support or strong and very irritated opposition. And much more of the latter than the former. If I have the chance to pursue the conversation, those opposed to "cancel student debt" are very amenable to student debt relief AND reigning in the escalating costs of public education, including vo-tech training and apprenticeships. I'm afraid that the drumbeat of those three words "cancel student debt" have had a similar impact (and abuse by Republicans) as "defund the police". It puts us in a position of explaining and having to have a deeper conversation, and at the same time throws up a hurdle to that very conversation. I love Elizabeth Warren like crazy and phone and text banked like a mofo for her during the primary. But that hashtag seems to have hurt more than helped.
It's the interest on these loans that steals your soul. We made payments for years, and the principal didn't budge. The overall amount due on the loan was actually BIGGER. Not only should student loan debt be forgiven, I believe future student loans should be zero interest. Our taxes can manage the administrative costs.
After reading through this thread it occurs to me that another very popular thing that the administration could do is to bring the wrath of the Federal Government down on the student loan industry. A very noisy, public investigation by the Department of Education. An NPRM that drastically tightens up the rules for student loan servicing companies. A few executives hauled off to Leavenworth for deceptive business practices. These would all go a long way to solving the problem and would be seen as doing good by more than the 12.9% of Americans who have student loans.
First off, I have a lot of student debt that I willingly took on. Second, I also understand that not everyone is doing as well as me, which says a lot when I am a social worker. I want to pay my student loans, but even the payment generated by the income-driven formula is too high for me to make. It would be amazing for my monthly payment to be reduced by $100.
I think there are some creative ways to help people out with this without Ted Cruz crowing about it on Fox News and Twitter.
This hits home. If Biden cancelled $10K of my daughter's debt, I would sure as hell share that on social media, immediately and just before the midterms.
I’m onboard with debt relief, but why is no one talking about addressing the systemic problems that got us to this point?
My kids went through college about 20 years ago. Three kids, three schools, thirteen years of FAFSAs and signing loans. And every year - EVERY YEAR - tuition and fees at each school increased more than the rate of inflation, cost of living, etc. Pick an indicator. The increase was greater. And it appears to me that hasn’t changed in the 20+ years since.
The schools have no reason to alter that. Nor do companies like Navient that do everything they can to squeeze every last dime out of each and every loan. They know parents and students will just suck it up and take on the loans and the hassles that go with paying them off.
I live in MA and have tried getting Warren to speak to it. Crickets.
Cancel the debt without fixing this, and 20 years from now this will still becan issue.
It seems to me it would be a political winner to address the systemic problems simultaneously.
So why is it not at least discussed?
He should do it. If R's threaten litigation, let them hang that albatross around their necks--another unpopular position for them to own.
Not only would this be a big announcement on its own, but he could use it to showcase/raise awareness of his other recent student aid proposals--raising Pell grant awards to $8,670 annually, support for HCBUs and Tribal colleges, $200m for "career connected high schools" that let kids earn college credit. This has gotten little attention but it should. It's another way to reduce college costs and thus future debt--addressing some of the "fairness" concerns about how cancelling student debt today does nothing to help future students.
These latest proposals rest with Congress, maybe a little pressure would help. A midterm issue that would help the D's.
Let’s say that today all student debt is cancelled. The class of 2026 then starts school in a few months. Tuition and fees haven’t changed. They will still need loans and grants to pay for school. So we start running up debt that we have just built an expectation will be forgiven at some point. What will change? Several things: More unprepared and uncommitted kids will take on college as a flier. Or just to have that “college experience”. Schools will increase the rate at which they charge tuition. There’s nothing magically ethical about schools—use hospitals as an example. The more generous insurance gets, the faster their prices go up. We have already seen that happen as student loans have been easier to get.
Schools and lenders don’t collude because they haven’t had to. Both groups were savvy enough to realize that the loan - tuition situation turned into a giant hog trough they could both feed from.
I realize students and their parents have been conned. I wish we could charge back a third of these loan balances to lenders, and a third to the schools, and let the students pay a third. Then everyone gets a lesson.
If I am a 20-something EMT, LPN, plumber, etc, who had to pay for my technical training myself, how pissed will I be at this?
Finally, imagine what would happen if the government paid off all credit card debt. Or gambling debt. Or mortgage debt. This simply can’t happen without fundamental reform of the processes that got us here.
I hate to be a downer, but cancelling student debt right now would be more than a bit tone deaf. Stick with me here...
Student loan debt impacts about 12.9% of the population. Significant, but far from a majority. Of those, about 40% (or 5% of the overall population) are in the ugly situation of having taken on the debt without ever earning a degree. Some percentage of those folks are being helped by the Biden administrations efforts to relieve those defrauded by for-profit colleges. The other 60% are, by and large, doing better - even with the loan debt - than those without a degree. Over their lifetimes they will do much better, earning almost 2x more.
So the soundbite net of that is: "most people with college debt are still doing better than average".
If Biden were to wave the executive wand and cancel $10k for everyone, it would be seen as essentially the same as handing $10k checks to a group of people who are already doing better than most (at least by the numbers). I can already hear Ted Cruz shouting, "Look! The democrat elites just gave ten grand to their own kids! What did they do for your kids?"
In normal times, that might wash out after a couple of cycles. With record inflation eating everyone's savings it would land and become yet another stupid talking point in the already inflamed education genre of culture war.
What Biden is doing now - programs to fix the broken aspects of the student loan system and turning off interest - is as good as it gets until the economy stabilizes and his numbers improve. Forgiveness (or better yet, greatly expanded opportunities to earn forgiveness by taking public sector and/or not-for-profit jobs) should wait until at least after the midterms, and more likely until a second term.
When this has come up during canvassing NAVs, I hear either strong support or strong and very irritated opposition. And much more of the latter than the former. If I have the chance to pursue the conversation, those opposed to "cancel student debt" are very amenable to student debt relief AND reigning in the escalating costs of public education, including vo-tech training and apprenticeships. I'm afraid that the drumbeat of those three words "cancel student debt" have had a similar impact (and abuse by Republicans) as "defund the police". It puts us in a position of explaining and having to have a deeper conversation, and at the same time throws up a hurdle to that very conversation. I love Elizabeth Warren like crazy and phone and text banked like a mofo for her during the primary. But that hashtag seems to have hurt more than helped.
It's the interest on these loans that steals your soul. We made payments for years, and the principal didn't budge. The overall amount due on the loan was actually BIGGER. Not only should student loan debt be forgiven, I believe future student loans should be zero interest. Our taxes can manage the administrative costs.
After reading through this thread it occurs to me that another very popular thing that the administration could do is to bring the wrath of the Federal Government down on the student loan industry. A very noisy, public investigation by the Department of Education. An NPRM that drastically tightens up the rules for student loan servicing companies. A few executives hauled off to Leavenworth for deceptive business practices. These would all go a long way to solving the problem and would be seen as doing good by more than the 12.9% of Americans who have student loans.
First off, I have a lot of student debt that I willingly took on. Second, I also understand that not everyone is doing as well as me, which says a lot when I am a social worker. I want to pay my student loans, but even the payment generated by the income-driven formula is too high for me to make. It would be amazing for my monthly payment to be reduced by $100.
I think there are some creative ways to help people out with this without Ted Cruz crowing about it on Fox News and Twitter.
Dan, why aren’t you one of Biden’s top advisers or in the Democratic Party leadership? Your knowledge, insight, and wisdom are amazing.
This hits home. If Biden cancelled $10K of my daughter's debt, I would sure as hell share that on social media, immediately and just before the midterms.