I don't see much problem with these two Democratic proposals. It is good that Mr. Sanders thinks about making the US undergrad education free - this system used to work well in the Soviet Union, with an impressive number of scholars and professionals with deep knowledge and well-refined analytical skills. Frankly speaking, I don't see a need in forgiving ALL student loans - some families may be wealthy enough to pay it back, plus the decision to take a loan is oftentimes a conscious one. Especially for graduate programs, which are not mandatory, there should be little to no government assistance in helping students covering their debt.
I think the ultimate problem here is not that students have to take loans, but the fact that they cannot claim a successful career without having a university degree. For instance, an MBA degree advances your chance of getting a high salary (you get twice or three times more money performing the same job). Yet it costs $100,000 to obtain one such degree, thus students rush into financial institutions to get a small piece of hope for their future, for which they also should pay afterwards.
Also, why not promoting public education instead of those superexpensive Ivy League colleges? If more people enroll into public unis, less probability is that they would take loans to finance their private education, hardly regulated by the government. As a result, Sanders and Warren plans will perform even better in such circumstances.
I too think that loan forgiveness doesn’t address the real issue. Why has the cost of tuition become so high. Forgiving the debt and offering free tuition will start the cycle up again. A better plan would separate the two issues, college costs and student debt. There are ways to help reduce the existing debt, mainly interest charged on that debt. The second issue should start with requiring colleges to tie graduation rates to employment post college and creating very good student counseling services that help students determine the best way to focus their education with the goal of gaining meaningful employment after graduation.
Simply clear the board. If debts are not going to be repaid, then only fools would make the loans in the first place. So no loans and no debts to be cleared. Going to force some reality into higher "education" or whatever the nuttiness prevalent there is now.
A useful step would be for a federal investigation into why student is so high and try to do something about lowering costs.
1
God, no. So far Warren is my favorite among the crowd of Dem hopefuls, but this is just nuts. I work for a college, and I'm saying that. I am in favor of reducing the interest rate on student loans, and loan forgiveness in some cases, such as people who work in low-paid public service professions especially in underserved areas. But a blanket write off would send the wrong message and create resentment from those who paid off their loans and those who didn't go to college. Free undergrad at public institutions sounds good, but for how long? Four years? Six? Ten? What would stop public colleges from admitting students who are completely unprepared to do the work? How do we avoid the perpetual student, who never finishes a degree but will keep going to school to avoid having to get a job? This is the kind of pie-in-the-sky nonsense that will get Trump another four years.
5
this article was full of junk stats. if undergrad makes up 45% of all loans then that means private school, for profit, and graduate all split the remaining 55%. meaning that undergraduate debt being addressed will have the single broadest effect.
If the problem is young adults take out big loans to study some subject at the university, and then they graduate and have so much debt and so little income that they cannot afford to repay the debt, the problem isn't the debt.
The first problem is they spent too much on a program that has no return, like paying $10,000/ounce for gold. You don't help people do that, you tell them to not be conned by the high price.
The second problem is why would you want to fund education for low paying jobs? Why take money from all taxpayers and give it to people to waste on an education that has so little value in the marketplace?
2
The companies that service student loan debt are like leeches on the body of American society, draining away income that should be used to grow our future. The $1.6 trillion in student loan debt is a huge break on our economy! If we want to remain competitive in the world we need to make low-cost higher education a priority. I agree wholeheartedly with Senator Warren's proposal.
1
I had nearly 300K debt when I finished graduate school. Have worked hard to pay it back. Sacrifices, not just daily discretionary spending, but even life changes like real estate.
However, my loans were closer to 2-3% interest. Why not limit it that way so that people can take out loans, refinance, etc.
And, if we wipe out all debt now, what happens in 4-5 more years, when a new crop of students comes through with debt? it does not make sense. Dems are giving this election away!!!!
4
We're at the point where a few too many soon to be high school graduates are asking if college is worth the cost or the risk of taking on the enormous debt. That is a terrible scenario for this country as we continue moving into an increasingly competitive and sophisticated workplace. We will have college educated people in our higher level corporate jobs. The question is, will our senior execs be homegrown or we have to bring them in from other countries where they are getting their education for either free or for a fraction of the cost
3
Let's start with ZERO loans to people attending for-profit "colleges." Let those schools use their profit to offer loans to their students, most of whom they're fleecing anyway... as those schools' degrees pretty much lead nowhere.
3
Other than education, what commodity with no current financial value, and at best speculative future value, can a person borrow $100k on up against? It's like the government loaning money to buy casino chips. Some will win, but pity the ones who (in many cases, predictably) will lose.
The government should write off the bad loans on a theory of contributory negligence, for issuing an unsecured loan in an amount disproportionate to the person's creditworthiness.
1
This is such a classic Democratic ploy, give them something that will buy me votes. No real thought to the potential adverse consequences or who will pay. No thought to why college tuition grew as the result of easy loan money so colleges just harvested the loan money without having to turn applicants away. There would not have been a for profit post secondary industry without the federal loan system. See how several closed without access to the cash. What about the people who don’t graduate and probably shouldn’t have been there in the first place ? Our country doesn’t need all managers and no workers. We may need engineers and research scientists but not everyone is capable or inclined to accomplish that. The thought of middle class parents saving for the education of their bright offspring is not a personal responsibility. It’s the responsibility of the parents of non college bound taxpayers or the graduates who paid off their loans or worked their way through and pay taxes now.
2
This morning I received a call on my cell phone telling me how I can reduce my student loan payments. It is now about 50 years since I paid off my student loan. Three years ago I refinanced my home to pay off my daughters's student. I cannot understand how these scammers choose their potential victims.
1
Canceling this enormous dent will certainly help young people get ahead, instead of dragging behind. It will also help my 42 year old underemployed son, who went to college late, discovering that it really didn't help him find a good job, only crappy jobs.
5
It is the same basic issue withe subsidizing healthcare costs: it does NOTHING to address the cost side of the equation. The price of a college education has risen 3% faster than the rate of inflation for more than a decade now, and this is completely unsustainable. Canceling debt and making public college free does nothing to fix that. And then don't even start with the question of whether it's fair to cancel current student debt and ignore those who worked for the past decades to pay off their own. Or whether it's fair to cancel debt for people who have plenty of means to pay it off themselves. And so on.
6
A major element is student loan interest. As a middle ground, I would like to see it capped at 1%. The burden for people, like me, with significant graduate school debt, would considerably less if our payments went to principle rather than interest. The Government is charging up to 8%, which is obscene.
6
I refinanced my home and used the proceeds to pay off my millennial daughter student loan. Both my daughter and I am now at peace and will not have to deal with the education secretary.
1
How about this: don't go to a college you can't afford.
5
Why don't the Democrat presidential candidates simply call for reversal of Joe Biden's life work of legislating taking away bankruptcy protections from student loan debtors. Because from Hillary to Bernie they're essentially ok with it. For them Biden's gaffe about liking segregationists is the much preferred and more donor friendly attack route.
3
I am surprised that perhaps no one realizes (yet) that the student loans are not amortized as they should be. When $20.00 a month "amortizes" a $40,000 loan by services in the public sector, it will never pay off. Hence the trillions outstanding imo.
2
Transferring student loan debt just changes who is stuck with the burden: from the one who benefitted from the LOAN to the middle class tax payer.
5
If all debt is canceled, will borrowers face IRS bills? Currently, when loans are forgiven due to permanent disability, student loan payments are replaced with IRS payments, as the amount is now considered income. Students merely replace one bill with another, and the IRS bill doesn't offer a 30 year repayment plan. The Times wrote about this issue several years ago, but no one has taken up the cause.
Unless the IRS issue is addressed, short term, the students are in worse shape, as IRS payment plans are only three years, and the payments are usually higher than the loan payments.
3
@Mrs. Cleaver No, when the borrower whose loans have been canceled via the Department of Education's NELNET TPD contractor for permanent disability, they potentially have IRS COD (Cancelation of Debt) income, but they are allowed to eliminate that if the borrower was insolvent at the time of the loan cancelation by filing IRS and state tax returns for that year, which I was. Furthermore, if the loans are canceled though the US Bankruptcy Court, there is no COD debt period, as the court cancels that immediately.
2
It's not the loans...it's the interest!
1
I worked for a medium-sized public school district. The policy of that district was that they were preparing every student to go to college. This sounded progressive and was popular with parents, but the fact is that every student is not capable of completing a college degree. Students lose out, both in terms of feeling that they are competent and have valuable skills. Their precious time is wasted. There is a need for people to work in the trades-- and a need for public education to prepare students for a satisfying and adequately-paying job. But teaching college prep courses to all, is not the way.
6
So the Dems just want to concede to Trump now?
4
Cancel? You mean transfer the lawful debts of others onto me. No thanks.
4
College education is exactly like the housing bubble of ten years ago. Lots of people take obligations that they will be unable to repay and then expect that the rest of the people pay for their irresponsibility. I say let them suffer the consequences!
3
50-55 years ago, the combined cost of tuition and books was about $200.00/semester to be a student at the large public university I attended. So what, then, if you had little to no interest in or practical use for half the required courses you took? If, e.g., you were majoring in a science, but needed humanities credits to graduate, you simply took the easiest humanities courses (e.g., 3-credit Art History), wrote it off as part of the program, and pretty much forgot everything you learned as soon as you took the final exam.
Today, at $20,000/semester, that exercise becomes a little more financially problematic for students. We can point fingers at who is making out (e.g., faculty, administration, contractors) in this deal, but it certainly isn't the average liberal arts graduate. Focusing on student debt as the problem functions to divert attention from the larger problem of parasitism in higher education.
2
College debt forgiveness and Universal healthcare and/or Medicare-for-all encompass complicated and variable nuances and issues that demand in-depth studies by highly qualified researchers.
Successful plans will require carefully crafted rules and procedures with guaranteed expected outcomes.
These issues will be quite impactful to all citizens. Hence we must ensure that our best and brightest academics are involved in the design and ramifications of these programs. The politicians can then sell well-thought-out policies to the voters.
1
Forgive my mortgage Bernie Boo Boo, I already paid off my student loans. Think of all that extra money going back into the economy . The banks can afford it. Com e on now Bernie, you the man. LOL
3
You can still enact stricter regulations about giving loans to 18-year-olds so that unqualified borrowers can't get themselves into trouble, and the very existence of a free alternative should stall tuition increases at for-profit.
That being said, I'm not quite sure this is all being handled in an adult manner.
1
The idea of Senator Bernie Sanders and Senator Elizabeth Warren canceling students loan may not be an ideal proposal to the United States and will result in a bigger problem. The United States had been moving as a capitalist/socialist society and most basic concept of it is own economic success is achieved by oneself. Canceling student loan debt is a communist society giving everyone an equal opportunity to free themselves from paying extra taxes from their debt. The problem will substantially increase as money inside the United States will not be circulating that would put the U.S. more in debt and the people questioning own socio-economic ideology.
Who does no one realize that by paying off all student loan debt, Sanders et al would be lining the pockets of the banks and other lenders? And allowing/encouraging the colleges to continue to charge exorbitant prices for tuition, room and board. I mean, no negotiation? Just pay off the loans with high rates of interest, no matter for degree/institution? Insanity.
4
There is something about paying off student loans for people that does not sit well with me. I went to Grad school and was able to take out minimal loans because I worked 3 jobs, drove an old car and lived in a junky house. We didn't vacation. My fellow grad students took out loans, didn't work real jobs and lived in better parts of town. The loans weren't for the education, they were supporting a lifestyle.
Then for undergrads, my friend joined the military and had his education paid for that route. Is it fair to him that his taxes are used to pay the bills of someone who choose just to take out loans?
My friend's kid went to a state school; she wanted a private school, but could not afford the difference. So she made a compromise to limit her loans. Should she be asked to pay the loans of her classmate that took them out to go to a private school?
In my opinion, what is fair is to forgive people the tuition they would have paid to go to a state university. I believe everyone should be able to commute to a state school and get a degree for a nominal cost. Anything beyond that is a choice to spend more than you need to to get an education.
3
Most of that $1.6 trillion is imaginary money—interest. So forgiveness really doesn’t cost tax payers that much. Future loans should probably be discontinued or lent at zero interest to students committed to programs that will almost certainly lead to high-salaried, good jobs. Lack of opportunity? Heavy debt is servitude, not opportunity.
3
It's ridiculous and won't fly. There are ways to deal with the problem that could gain more broadbased support: one would be to have the government lower interest rates, perhaps based on income. I believe it's morally wrong to penalize those who were more prudent in their financial decisions and have made a greater effort to satisfy those obligations.
1
people lobbying for student forgiveness are probably the children of parents who took out second mortgages during the financial crisis and got foreclosed on. I'm generally a liberal but not for bailing out people with no financial common sense.
2
Higher education is a disgrace. 64% inflation last 10 yrs. Wonder where all that debt goes? The higher ups and administrators. Not towards a better education. Notice how everything you need to learn is available online.
What about the debt odometer spinning with the tax breaks just passed? Every billionaire is a policy failure. Articles like this just help maintain that giant sucking sound of the financial squid fixed to Americas' face.
4
Back in 1964 my father paid the $300 per semester at Memphis State University. He gave me cash for a food allowance. I lived on sodas and fried pies from vending machines and pocketed the rest. After I left the home of my racist and ignorant parents, I could not afford to continue school. I got a job as a waitress that paid 52 cents an hour. In the 1970s I was approved by Vocational Rehabilitation and was able to return to college because they provided a stipend and paid tuition and books. I continued to work part time as a barmaid in New Orleans. I graduated in 1975. Later my stepfather committed suicide and I received $14K that he had willed me. I used the money to go to graduate school.
I wonder how much todays students with their loans actually spend on stuff they don't need. It's sort of like the loans are there so I can spend the money on whatever. I am not trying to demonize those who have student loan debt but only pointing out that loans eventually have to be paid back. Are today's students frugal or are they thinking that they can pay off the loans down the road? Just sayin'.
1
Discharge/Forgive/Mark Paid In Full student loans owed by people age 60 & over, or who are disabled, and whose ONLY income is Social Security or Veterans benefits, and the like, and who have no other tangible assets, e. g. stocks, bonds, real estate, with their home being exempted...Senior citizens/disabled persons with high dollar debt won't ever be able to pay the loans, and would no doubt benefit from the peace of mind that would come with not having to Worry about being haunted by this unwieldy albatross of debt...
2
Why don't these Democrats realize that they need to propose plans that are *feasible*? Unless the Democrats win the majority in the Senate, most of their plans are pie in the sky. Moreover, these particular plans to cancel student debt do nothing to alleviate the cause of the high debt and appear to be merely pandering to the young. Why have costs for college skyrocketed? Because state governments have stopped supporting higher education. Most of the top state universities are now funded at less than 50% by state tax dollars, sending tuition sharply upward. In addition, most colleges think they need to operate as country clubs to attract students. There are other issues and practices, as well, that underlie the increase in college costs. Canceling student debt does nothing but encourage those wasteful and foolish practices to continue. Fix the root cause first.
5
The public university system has not kept pace with the growth in students seeking higher education. While some community college systems have scaled up, state universities have not kept pace with the demand. Private and for-profits have grown, but at huge cost to tax payers in loan subsidies and to students. The solution would be to offer broader range of reasonably priced alternatives with valued credentials. The focus should be as much on value of education as on college experience. There is plenty of money, it is just being spent on luxury college experiences and football programs rather than on education.
1
While I have my biases as someone with a lot of student loan debt, two things never cease to amaze me in this discussion:
1. Too many people treat potential benefits as a zero sum game. Don't get me wrong, I understand that there's only so much money to go around -- but just because it's good policy to not have 45,000 lawyers graduate per year with six-figure debt but only 22,000 law jobs available, doesn't mean I don't also want to see helpful things happen for trade school graduates, union employees, etc. Maybe tie loan availability for institutions to graduate outcomes or something in addition to making forgiveness available to those who do get loans -- but don't sentence someone to a lifetime of debt they can't discharge through bankruptcy just because they tried to better themselves so they could contribute to society at age 22.
2. Concern that complete loan forgiveness would encourage tuition inflation and thus cost taxpayers greatly is wholly misplaced. Tuition is ALREADY grossly inflated, and taxpayers ALREADY suffer greatly when the economy is saddled with defaults and would-be consumers deprived of circulable income. Giving people back control of their mortgaged futures is a solution, not a problem.
1
The solution is to restore the option of using the bankruptcy court to student loan debtors. Student loan creditors currently get a preferred status in bankruptcy because it is very difficult if not impossible to discharge student loan debt (absent undue hardship, which is almost impossible to prove).
Start treating student loan creditors like other creditors in bankruptcy. Bankruptcy court judges and administrative personnel are there to specifically deal with bad debt. Bankruptcy judges can be trained to look for fraud and abuse in student loan cases to make sure bankruptcy isn't an overly generous solution for someone whose income is likely to grow enabling repayment.
Then, since the country needs more health professionals, the government/taxpayers can better subsidize the education of those willing to go into health careers that are in demand.
Congress should also look to Canada for solutions about how to deal with payments/cost of medical services so unintended medical debt doesn't result in someone not being able to repay their student loans.
1
"The German system sets up an awkward situation: The taxes of people who forgo college help pay for the education of those who attend."
Yep, that's how taxes work. The taxes of people who don't have kids help pay for public schools. The taxes of people who don't take the bus to work help pay for public transportation. The taxes of people who prefer not to read nevertheless help pay for public libraries. It all contributes to the common good and improves the economy. It's not a zero-sum game.
4
It sure would make a lot of my problems disappear. Got sick in school without insurance. Thanks a lot, America.
1
NOT TRUE:"most student loan debt isn’t taken out to attend undergraduate programs at public colleges and universities. Most loans are used for private colleges, for-profit colleges and, most of all, graduate school."
Here are the facts:
65% of seniors graduating from public and nonprofit colleges in 2017 had student loan debt.
Average debt at graduation from public and nonprofit colleges was $28,650 in 2017, a 1% increase from 2016.
66% of graduates from public colleges had loans (average debt of $25,550)
75% of graduates from private nonprofit colleges had loans (average debt of $32,300)
88% of graduates from for-profit colleges had loans (average debt of $39,950)
About 15% of the student debt held by the graduating class of 2017 was private.
48% of borrowers who attended for-profit colleges default within 12 years, compared to 12% of public college attendees, and 14% of nonprofit college attendees.
4
The student debt problem is similar to the lack of universal health insurance. Fixing the debt or the health insurance part does not attack the fundamental problem that both higher education and health care are too expensive. As long as we keep throwing money at the problem, it will only get worse.
1
I do not support either candidates proposals and will vote accordingly.
I will vote for universal free early childhood education and vastly improving secondary education. In general our high school programs are a joke and turn out students ill prepared for either the world or college. Holding students back for poor performance would help- I have no idea why we abandoned the practice.
3
Sure would make my problems disappear. The interest is now 4 times the original loan.
2
For what it's worth, this article points to a missing piece from a lot of proposed reforms, not just in education: a focus on cost rather than pricing.
Healthcare: Let's do what we can to keep the cost paid by patients from rising too much ... but do nothing about things like hospitals charging for tests based on numbers pulled out of thin air.
Money in politics: Let's publicly finance elections ... but ignore the fact that that will mean hundreds of millions of dollars flowing into corporate media coffers.
And education? This article is right to allude to the pricing problem in especially higher ed ... but fails to point to specifics, such as the almost unreported and arguably unmerited rise in spending by bloated college administration departments.
In each case, a half-measure (e.g. Obamacare for healthcare) is better than none, but also only kicks the can down the road.
Why? Because in our "drunk with capitalism" mentality, going after pricing in these areas -- all areas of public good, by the way -- seems somehow wrong, socialistic, whatever.
So the wheels keep turning round, and we always end up back in the same place, only worse.
2
Big picture numbers to the nuts and bolts of policy. Well said. And there are implications on the institutions that will be flooded with student to be able to truly educate well and hold to some standards of success, and house residential students. On another issue, we are very strong in this country in touting choice as a very important right. People who choose to go to school and choose to enter into debt, are taking a personal risk in view of their desire for a future. No one who made this choice is without some accountability. There is no such thing as a risk free future.
That being said, I would much prefer that a national service program be put in place which would reimburse tuition debt based on 2-4 years. I would also up regulations on for profit colleges. And finally I would like to see a study on the quality of on-line education courses that would separate the wheat from the chaff.
3
The US taxpayers collectively bailed out the big banks during the Great Recession. Why not lean on the "goodwill" that is sure to exist and basically have college loans given at 1-2% over the rate that the banks borrow money from the government. No one is paying outrageous rates and a college degree becomes much more affordable.
The hard part is keeping the for profit enterprises from once again making it a simple money grab.
1
I finally paid off more than $143K in student loan debt in November 2017 (but not without delaying marriage and home ownership, and, unfortunately motherhood). Now you want to tell that that I have to pay off other people's debt too?! I don't think so.
6
These plans are like pie in the sky that bypass realistic options. Simply eliminating the compounding interest and converting to simple interest would change people's lives and makes these loans realistically repayable. Or honor programs that currently exist, like public service loan forgiveness, instead of denying 99 % of approved applicants once they submit their final application. Compounding interest, coupled with pushing people toward degrees and careers in public service with the promise of loan forgiveness and then yanking it away once they're stuck with low paying jobs is beyond predatory lending.
2
It has been shown how colleges and universities used the easy availability of student loan dollars to build huge new often unnecessary buildings rather than improving the quality of instruction by hiring better professors or aiding more less affluent applicants.
In fact the opposite has occurred. There are now less full time tenured faculty and more part time adjunct instructors. The colleges and universities seek out more out of state and international applicants as they can bill them at higher rates than in state students.
If the proposal to eliminate loans used for this gains traction, perhaps billing the institutions responsible for overcharging students would be in order?
3
College costs have gone up 2x the inflation rate since 1999. If they had only matched the CPI costs would be 1/2 of what they are now. For those of you who might say the rise was due to added benefits the cost of text books has matched college costs. Fix this with financial discipline and there would be no debt. Let it go and any subsidies will only let the costs continue to rise.
1
Don't trust any of these politicians. Their promised plans sound fabulous, especially for those struggling under the weight of student loan debt, but most of their plans are unicorns and butterflies, and don't deal properly in reality. If you need proof that the government will mess this up, just look at the current income based repayment/loan forgiveness plans. These plans promise that after a certain number of years of making minimum payments, the rest of your balance will be forgiven, but there is so much red tape that it's nearly impossible for the average person to get the promised forgiveness. In the mean time, while the borrowers are waiting for forgiveness, the interest on their loans causes their debt to balloon, with some people owing more after 10 or 20 years than what they started with. The only way to get out from under the burden of student loans is to pay them off yourself. I say that as someone who started out with a mortgage-sized student loan debt. I have had to throw every penny I had toward my student loans over the last seven years, but I am now about 6 months away from having them paid in full. And I'll admit to some fortunate circumstances - I had a good middle-class job immediately upon graduation, which made paying extra on my loans possible. Still, the point stands - you have to rely on you; a government that can establish loan forgiveness one day and take it away the next, is not the answer.
1
College is an old fashioned, expensive and inefficient approach to education. I'm not saying it should be eliminated, but I am saying we should stop protecting and enabling it.
Tax-free college savings accounts and cancelling all education debt encourages spending and prices to continue spiraling upward.
Suggestion: Today, higher ed has a monopoly on entrance to many fields - college degrees should be eliminated as a requirement in many fields, since there are plenty of free or inexpensive (and perhaps better) ways to learn and certify competency.
For example, if I can study independently and pass the stringent CPA exam, I should be able to become a CPA (without a degree). Prospective employers and clients can decide for themselves whether or not they want to hire me.
3
Anyone planning to have kids will benefit from debt-free higher education. That way you will not have to save for both your kids’ education and your retirement. Or your children and grandchildren will benefit.
Everyone has to deal with people who are highly educated: your doctor, lawyer, healthcare worker, even your barista; it is always better to deal with someone who is not overwhelmed with their debt. It is always better to deal with individuals who have chosen their vocation and like their work.
There are some talented people out there who don’t get a higher education because they don’t want to deal with the debt load: think Clay Aiken, Taylor Hicks, etc. only doctors, scientists, researchers, etc. Debt-free higher education could have more positive impact than people initially think.
2
I’m all for free higher education but how do we make this plan fair for all? I have about $100,000 in student loan debt. I’d like to have it all forgiven, but what about the people that paid their loans back already? What about people that decided not to go to school?
In reality, neither of these plans will ever come in to being because of their inherent flaws. Bernie and Ms. Warren are simply touting them in order to try and capture the nomination and possibly the White House. And then they’d backtrack and blame it on republicans or congress much like Trump blames everything on the democrats. If people are too naive and gullible to fall for this we’ve fallen a long way in society. I’m a Democrat but I’d never vote for either one of these power hungry Senators.
4
How about cancelling the interest and extending time for loan repayment, or capping repayment amounts at a fixed percentage of income, like 5%?
3
There is no easy way out of the student debt crisis. Private universities have increased their debt to pay for massive building projects, and increased tuition to pay for them. For profit colleges are a well-known debt trap for the gullible. High priced professional schools are a recent thing at public universities, and should not be allowed to charge more tuition than the undergraduate programs. That they do is a failure of their governance.
2
To all the commenters whining about how they'd be the good-choice-making "ants" who are punished while the bad-choice-making "grasshoppers" make a windfall with student loan forgiveness, please spare us all the sanctimony.
The money my parents saved for my college fund was wiped out by an unscrupulous lawyer the year before I started college. Fair? NOPE.
I went to a state school, paid in-state tuition, worked full time in the summer and part time during the academic year, and still have student debt (some of it from graduate schooling, but certainly not all of it).
I have a good job now, and pay a huge chunk of my income on student loans. The government charges me 6% interest. Fair? NOPE. Not when the debt is not dischargeable in bankruptcy.
I am more than happy to pay back what I borrowed, but the government shouldn't be MAKING money off of me this way. I pay taxes on the money I earn, receive a paltry tax write-off for the student loan interest I pay, and use my after-taxes cash to pay for my loans. If I bought a house, the mortgage deduction would be much more favorable to me. Fair? NOPE.
I don't give a hoot if some people benefit from a program and I don't. I'm not that petty or small-minded. I know that if we unleashed the power of more disposable income in the hands of 44 million Americans, everyone would be better off. That's enough for me. Ask yourself: why isn't it enough for you?
8
I don't think higher education should be free. I think the loans should be reasonable and easier to pay off. I have loan with interest rates approaching 8%. This has ruined me financially. I work two (good) jobs just to keep up. This is killing me.
Additionally - try paying extra on a student loan, or "overpayment" and this gets even trickier - with the overpayment possibly applying only to interest and fees rather than the principle. One can search the multitude of articles on this subject.
Decrease the interest rates, make it easier to pay, and everyone can go to college.
2
Have govt officials ever considered making interest on student loans (for tuition/books at least) tax deductible? (The biggest correction they could make to US class structure would be at least a limited period restoring the former interest deductibility for all debt.) How about deducting tuition/book costs, at least to a certain level--to encourage education, either in total or in specific fields where we need more experts/workers?
Whenever I hear Sanders & Warren offering free public college, I wonder if they know precisely what they offer. For ex., my native state of Calif had jr. colleges (essentially free once upon a time) everywhere I lived, state colleges within commuting distance & world class universities throughout the state. Oregon has many fewer opportunities; citizens are responsible for choosing not to have major universities. They voted to expand the only community college here in central Ore to a state agricultural college rather than a University of Ore that could bring much-needed doctors, dentists, etc--a rejection of education & educated people often seen here. Will people in education-friendly states like Calif have to pay to support many quality schools while other states' residents sit on their hands, sending their students to states who support many good schools?
Politicians fail to address this just as they fail to discuss the questions of loans for high living expenses, private universities that will be reflected in those graduates' later earnings.
Typical socialist throw-away solution - not logical, not planned-out, just pandering, pandering, pandering.
6
I'm the daughter of Kentucky Female Doc. I graduated college in 2016. If college becomes free, it will become the new public school and Master's Programs will become the new college. College will become bogged down with people for who aren't suited for it and education will suffer .
I went to public school and it is full of 17 and 18 yr olds who are itching to get out. They don't want to learn and they're just biding time. There's nothing wrong with that, but they should not go to college.
Unfortunately, many go to college because they don't know what else to do. They don't have the interest or the patience for higher education and for them college is an expensive babysitter. And I'm talking about rich and poor people. There should be more focus and support for skilled trade jobs so those from all social strata can have a good job and good money without college.
I think a lot of people go to college who otherwise wouldn't for the friends. There aren't many communities of young people outside of college or the military. Maybe there could be a trades program set up like a community college where kids live away from their parents, make friends, drink too much, and become independent without huge debts.
College is already enough of an incubator for people who don't have a plan and who don't want to in learn. Instead of adding more people like that to college, let's offer different avenues for success to young people. Going to college for college's sake is not a strategy.
9
Sounds like you’re saying that getting rid of student debt is no good without reining in student borrowing. I agree. So . . . Let’s do both. I would think the latter could be approached by giving robust support for institutions, such as community colleges, that already offer free tuition programs for many students. Perhaps by making an end run around “elite” institutions, will effect a redistribution of educational capital and promote a more egalitarian intellectualism. Meanwhile, the economic elite can certainly afford some increase in taxes to allow us to invest in our abundant human capital.
Many graduate programs have opportunities to lower tuition, many cover the tuition of their PhD students as well as masters. In addition, many programs offer teaching and research assistantships. I do not see statistics on this in this piece which I think would be quite relevant.
1
One-time debt forgiveness is a bad policy. It is unfair to many more people than benefit from it, from those who sacrificed to pay their debts to those who sacrifice to pay tuition other ways, draining their savings to mortgaging their homes, to those who were just too young for this amnesty and will need to borrow for college just the following year. This is a pandering campaign promise of the worst caliber: it promises a lot but leaves all the problems in place for everyone else to continue to suffer with.
5
Once an undergrad degree is free then having an undergrad degree will no longer be as valued in the job market: employers will demand graduate degrees for positions that really shouldn’t require graduate degrees. This has already happened to the high-school credential and is starting to happen to the bachelors degree. However, since colleges will still be free to charge what they please for graduate degrees, they prices for those additional degrees will go through the roof, leaving people in at least as much debt as before. However now we will be forcing people to spend even more of the productive years of their life in school rather than in the workforce, which is not productive for them or for the country.
2
There is already a prestige gap between public and private colleges. Can you imagine how much that will increase — that is, how much the prestige of a degree from a public college will decrease — when public college becomes free and private colleges can blithely admit rich kids at whatever tuition they want to charge because the problem of affordability is no longer their problem? A situation like free public college would worsen the class divides already so troublesome in our society.
What do you tell the folks who were forced to live in their parents basement for 20 years to pay off their debt? Sure it sounds great but getting it to work is a different story. We as a nation can't get healthcare right but we are going to forgive the debt of college grads? Really!!!!
5
Focus should be on cutting costs, not federal subsidies. Difficult to take Warren's claim for affordable education seriously when she was receiving $400,000/yr as a Harvard Professor. She's a symbol of the out of control costs
3
Limit student loan borrowing to 25% of median graduate salary for the program the student is in. That would roughly allow the student to pay-off their debt with 10% of their earning potential in 10 years after graduation.
If you are in an engineering program, you could borrow $17k per year. If you are in a journalism program, you would be limited to about $9k per year. Universities would either have to reduce the price for degrees with poor earning potential, or students would have to go to programs with higher earning potential. Problem solved.
If we don't trust 18-24 year old students to make financially sound decisions, and insist on protecting them from themselves, then you must stop them from taking more debt than they will be able to repay.
Letting a University charge $250k for an art degree with a $25k earning potential and asking the taxpayer to bail them out is wrong.
6
I finally paid off my student loan debt last year. It took me 12 years but I'm glad I did it. I feel proud of reaching that goal. It gave me a sense of accomplishment and self-confidence. People who don't pay their debts miss out on achieving that kind of self-respect. It's their loss because self-respect is priceless and worth even more than the money I paid.
I have no problem with plans to erase the debts of others. If others who are struggling can be helped, I'm glad.
I take responsibility for whatever I can control in my own life and also have compassion for others. You can feel both at the same time. But some people seem to be unable to do that. I guess life is simpler with an either/or worldview but it's not realistic. Life is much more complicated than that.
4
@sfdphd This is exactly how I feel. I am six months from having my loans paid off, and I am excited to be getting to the finish line, knowing I did it on my own.
At the same time, I would not begrudge someone else the chance to receive loan forgiveness. There are many people in more desperate circumstances than I am, who may realistically never be able to repay their loans. We shouldn't let people struggle forever just because we were able to do the thing they can't.
1
Nowadays, most loans are taken out for graduate school. Back when I went to graduate school, it was almost always free. In fact, most grad students like myself were paid to go to graduate school: we received tuition wavers and stipends as teaching or research assistants. It was recognized that graduate students became professionals who contributed to society and paid more taxes, because they got better jobs. It is criminal that this society is hamstringing their best and brightest.
2
Different graduate programs cost different amounts: sure pure science and math programs are still largely funded with stipends and teaching, but professional programs (law schools, business schools, med schools, dental schools) can charge a lot of money because they know that their graduates will go in to earn high salaries. I’m not sure that situation was ever different.
1
@Vanyali
My English PhD programs was free with a stipend.
People who attend medical, law, and business grad programs can expect high incomes, down the road. That's not true of most PhD candidates.
1
In 1992 I Graduated from the University of Pennsylvania with an MFA and $67,00 in (combined) student loan debt. I am still paying it off.
At Penn, incurring this debt was mandatory. I had been energetic and solicitous in lining up ancillary funding, from a variety of sources, including the State of Pennsylvania; but the office of Student Finance informed me that every dollar of grant or scholarship money would be deducted from the half-scholarship that the University was giving me. This meant that I must incur the maximum indebtedness from the combination of Perkins and Stafford loans--or else.
Due to the social politics of the time, there was little or no chance of sustainable employment post-graduation. Two major forces converged to block my way: By the early 1990's, the pressure to be seen as "hiring women" was reaching far into Academia; it was also a time when many colleges adopted the adjunct model, eviscerating their otherwise thriving humanities programs. The result at large was fewer jobs for women and men; and the jobs that did exist were not viable. Many people defaulted. Or their loans were payed by wealthy parents. My parents were barely able to afford their own retirement at that point; I had never been in debt before. I greatly appreciated the availability of the loans; I could never renege.
Today I am still in debt.
5
My 15 year old niece with everything going for her and straight A's said recently "why should I go to college? It is too expensive. I'll just be in debt for the rest of my life like my parents." This idea is the best option to prevent a great retraction of education before it is too late. I feel that this article is another example of black and white / all or nothing thinking.
1) No idea is perfect and if you have a better solution, please speak up - the world needs your idea. If 45% of the population of student loan debtors were absolved of their burden - People would be able to save for retirement, invest, buy a house, all of the things that increasingly people cannot do. Alleviating the burden of our generation and creating a free education system for the future generations is a humane decision.
2) By making public undergraduate education free it gives a multitude of people who would OTHERWISE NEVER HAVE ACCESS TO COLLEGE the chance to become college educated. If a person makes the personal decision to get a graduate degree, then that should be weighed with great consideration to their personal circumstances. Education is a right that should be afforded to all. This gives those individuals who would otherwise go into labor jobs or make the hard choice not to go to college the opportunity to rise up. It gives people in their mid-life a second chance. Not everyone needs a graduate degree or to go to private college to make a significant impact on the world.
2
You know how charities are rated by how much of your donation goes to actual charity work (rather than admin costs)?
Maybe federally subsidized colleges should be held to a similar standard.
Because the higher education crisis isn't the lack of debt financing. It's the underlying cost structure.
It shouldn't cost $50k a year to deliver introductory lectures to Freshman.
6
The author fails to mention this Sanders proposal wrt privaye college:
“HBCUs and minority-serving institutions (MSIs) would also qualify for this federal funding. Sanders’s proposal allocates $1.3 billion per year to reduce tuition and fees at private nonprofit universities and colleges with at least 35 percent of students from low-income households. Roughly 200 institutions would be eligible, Sanders’s office said.”
1
Many with truly crippling debt made a LOT of poor choices. I know my cousin did. She chose to go back to college and get her degree at age 50. She was going to become a public school teacher, not a high-paying job. She took out the maximum loan allowed. She went to her in-state public university and her mother and grandmother paid for her apartment. yet, she took out the maximum loan allowed. Why? Because she wanted to buy a new car and have plenty of spending money. She graduated with $65,000 in debt, a sum she will never live long enough to repay.
She did take a job teaching ESL in a middle school. This would qualify her for debt forgiveness if she paid her loan for 10 years without missing a payment. She did not - again, another new car.
Now, she's 65, living with her elderly mother and taking care of her and still having to teach. I do feel some sympathy for her predicament but I have no desire to pay back her loans for her. She made many poor choices over the years - choices that have consequences.
I was talking to her and she said she and her siblings do not want their mother to sell her house and use it to pay for a nursing home, which she clearly needs, as this would mean they would probably inherit nothing (it's not a very valuable home and her mother has no LTCI). I said I was sure that a small inheritance would be welcome to pay off some of that student loan debt. Her reply? She would use it to buy yet another car - a "nicer" one this time.
6
@India
I do not think the majority of the people with these loans are like your cousin.
It is a pretty universal practice within the USA that local and federal institutions regularly invest billions of dollars in various businesses to encourage the presence and operations of quite wealthy corporations for the prospect of gaining their participation in local businesses. The fundamental wealth of any community, any nation, lies within the potential of its population, thie skills, their intelligence, their overall capabilities. To neglect investing in those immense potentials is a monstrous mistake in both economic and humane consequences. The very nature of human potential lays in human characteristics of unknown and innovative areas and to put any obstacle in the path of their proper development is to poison potentials of a community that verges on the criminal and is monstrously stupid. The lessons of the GI educational grants post WWII and its wonderful benefits is very obvious and that lesson should not be neglected.
1
@Jan Sand
The GI Bill was promulgated to reward the veterans for their service. In other words, they earned the benefits. Giving things away for free often results in the recipient valuing the benefit at $0.00.
3
Something is wacko. We built a huge higher education complex at extremely high cost. Charge student huge amounts of money - so they can be assured of a good career. But the cost holds them back from success. Someone who saves $50,000 by age 22, anyway possible, and invests it will be on the his or her way to great wealth, while a student might be in debt her whole life.
And what is “education”? Its a meaningless idea because there is no standard. We dont know what it is. It spending 4 years at a university, or more that that in grad school, and getting a “degree.”
This whole thing is a mess if cost were low, but with the exorbitant costs, its a super sized mess.
I can agree with the objectors of Warren’s and Sanders plan, and in some ways I’m all ready to jump on board because it would eliminate my anxiety and fright.
I have student loans from massage school that is now closed totaling 15K. Massage school should never cost that much, especially when I was only given foundational and hands-on training (naturally), further spending hundreds on my CEUs every few years to maintain state license that just now went up to $250 here in Pennsylvania.
I know you’re thinking, wow - 15k is pretty easy to knock out of the park. Not on my income. When I worked as a full-time therapist (Tuesday through Saturday, closed Sundays and one day off on Monday) in a spa, I made close to $500 every two weeks. I was able to keep and save my tips and was able to save for some necessities separately, but the income barely covered my basic necessities and rent.
I only could pay off one. Almost two, but Sallie Mae now Navient somehow restored the balance overnight and basically lied that I paid the other one off which made me sick. I still have student loan payments - but I can’t pay them. I qualify for income based repayment but it doesn’t do much because my payments are zero but the interest is still there.
I was able to attain a salaried position to help with my loan payments and I also plan on going back to school to finish my bachelors degree. As for my loans, I plan on making payments but the game honestly feels like modern indentured servitude.
2
Medical school should NOT be as expensive as it is. We need healthcare providers that do not need to work their lives away paying off a lifetime’s worth of debt. They need personal lives too.
2
It would make the difference between the graduates of public university and quality private schools even more stark and would be another strong marker of social class.
1
It wouldn't be fair to cancel all past debt. People made life decisions based on whether or not to take out loans, many forgoing their dream school so they would not have to take out loans. It would be hard to be okay with the people who took out loans getting it free like that. Ditto, what about all the kids going forward? They would still have loans. The good thing to do would be to cancel all INTEREST on the loans and just have people pay back the principal and then going forward, same thing, no interest on loans, no one making huge profits off of them. And, way reduce interest on graduate loans. You only pay back the money you actually borrowed.
5
The government needs to get out of the student loan business. As soon as they stoop guaranteeing all loans the crisis will reach its peak and subside. It’s simple economics.
4
I guess I can agree, partially, with the reactionary idea that these socio-political plans, coined by Rep. Sanders and Warren, can benefit those with less fortunate educational pursuits (ex. someone going $60,000, in debt, for a career that doesn't land a job, like Philosophy) or financial circumastances (ex. being a child under a single parent, who works for New York City's minimum wage, all the while residing in a sketchy or dangerous neughborhood), but it is hard to understand the urge to put forward such plans, since they have a low likelihood, or none at all, of benefitting those who have debt in the future, since,
"the day after Senator Sanders “hits the reset button,” as he put it in the news conference, the national student debt odometer would begin rapidly spinning again."
- Kevin Carey, NYT
Henceforth, it is evident that such plans are merely reactionary, and not beneficial for the debtors of the future, given that this "debt-reset" does not act as a retroactive policy, but one that only benefits the contemporaries of the "student debt crisis," which is arguably a sign of the laziness or bad decision-making of the American young adults, who are either not working as they are being educated in their university, or choose low-paying, jeapordous careers (ex. Painting, Telecommunications, and Women Studies) to take loans for.
If the "underemployment rate" is 11-13%, meaning there are ~10 million people who are either not working enough hours or not using enough of their skillset. Given that, how does up-skilling more people help? It seems like it would lead to more internalized frustration and angst? I think we need more better jobs. Not just more jobs. And not more skills.
2
Warren's plan makes sense. Sanders' doesn't. It's not fair that we all have to pay the loans of a lawyer who chose to go to an expensive private university and is making a high six-figure salary. Bernie Sanders did a great job pushing the Democratic party to the left, when it had become almost as dependent on corporations as the Republicans. He showed young Americans that there was another way to do things. He should have enjoyed that legacy and let things be.
Still, we need to address education and the cost of universities. Universities are a lot cheaper in European countries (not just cost to students, but total cost per student). Like health, education is another basic need that here has gotten out of control, and we need to identify why and deal with it. For starters, European public universities do not need luxury dorms and lazy rivers to attract students because they are not competing with each other the same way (we don't really need as many universities as we have, for starters). However, although I believe universities should be affordable, they shouldn't be free. For some reason, we don't value what we can get for free. I think it is important to give people a chance to go to college without being buried in debt for life if they fail. But if it were free, many more students wouldn't make a good effort. And don't blame students, we all know the brain of 18-year-olds is not completely developed and matured yet. We, the adults, are the ones failing them.
4
Everyone should work even for a scholarship. I know we want to get into people who are not served. But these college students need to live, otherwise.
I complained we don't have enough doctors. What can we do to increase the doctor and nurse in levels in America
Perhaps reduce the cost and share their medical experiences throughout America because America needs them!
@Bob Washick
Back in 2010, while the ACA was being hashed out, Sen. Bernie Sanders secured $12.5 billion in funding to expand federally qualified community health centers program which now serves more than 28 million Americans.
Another $1.5 billion from another Sanders provision went to the National Health Service Corps for scholarships and loan repayment for doctors and nurses who practice in under-served communities.
One candidate has done something about this issue and continues to do so. Sanders M4A has provisions for training and hiring more medical staff.
1
@Dobbys sock
As part of the Obamacare law, the funding for federally qualified community health centers, along with supplemental payments for hospitals that served a high proportion of Medicaid patients was eliminated. When the five year funding expired, in 2015, some of those providers for the poor were able to survive with state assistance substituting for the eliminated federal funding, but many closed. That means the affordable care act reduced access for the most vulnerable, and Bernie voted for Obamacare, fully aware that the poor would suffer.
Why did Democrats cut funding? In order to create a set of assumptions that would result in the CBO asserting there was no increase in costs over the ten year window. That allowed Obama to assert that Obamacare would not add one thin dime to the national debt, knowing full well that in order for that to me true, the poor were going to suffer.
When Republicans gained a majority in Congress, they actually restored funding for the most vulnerable and Obama didn't have the gall to veto it. Democrats gave big money to enrich big medicine socialist cronies. Republicans allocated funds to the neediest among us.
You admire Bernie for his perfidy and pretend that anything Democrats do is intended to help working people.
How long will classroom education exist?
Most students are already traumatized by group education in large buildings where anything can happen and does. Such as murder and mayhem.
We all now learn quite a bit online.
Socialization is not occuring as it once was, where everyone played outside together from almost birth.
Change to teaching online, make it rigorous, cheaper and they will come.
I always hated classrooms, where bullies rule.
2
@Why worry
IMO, there are aspects of education that benefit from face to face interaction and other aspects that require detailed reading, calculating, analyzing that benefit from individual quite time, likely facilitated by computer technology. [If you are a math wiz, you don't need to work 15 examples of the same concept. If you are learning to write, having a spell, grammar, syntax program point out errors and poor word choices would improve your effectiveness as much as a skilled English professor critiquing your work.]
If the educational establishment were technologically competent, the bulk of college education would be conducted on-line, with coordinated computer driven individual instruction combined with recorded lectures and live Face-Time like interactive sessions. There would be occasional in person seminars and convention type events for in-person interactions. [That is how adult learning is conducted in the private sector workplace]
The dormitories could be converted to affordable housing for the locals and utilized 365 days per year instead of being utilized for two 15 week semesters.
Lower cost, much better outcomes.
You could qualify for a blue collar, highly paid electrician, instrument technician, machinist position. In your spare time, you could pursue a degree in
Greek archeology and go on digs during your vacations from your high paying job.
1
In reality, online classes cost just as much as in-person classes but the professors don’t even bother recording lectures, leaving the students to completely figure everything out on their own. I’m seeing this in my daughter’s community college classes and my husband’s masters program from a top university. In my opinion, the way online classes are going now, they are terrible.
The United States already has a mechanism for dealing troubled debt. It's called bankruptcy. Student loan creditors should stop getting a preferred status in bankruptcy court. It's beyond the time to treat student loan creditors like other creditors.
The Warren and now Sanders' plans are unfair to people who have paid off their debt, unfair to people who've worked their way through college, unfair to parents who sacrificed and saved and borrowed against retirement, and unfair to the people who will pay off the debt.
I am fine with taxing the heck out of folks who earn far more than they are worth (I'm talking hundreds or millions of dollars) off the back of honest investors and retirees and using those taxes to lower the U.S. debt and better the lives who can't even meet the basics but forgiving student loan debt is the wrong place to start.
8
@Charlie
You can put the blame directly on the graduates of elite Ivy League professional schools for the fact that student loans are not dischargeable.
Virtually every student graduating from college with student loans is bankrupt in the sense that his debts exceed his assets. But since student loans typically had a six to nine month window before payments started, most college graduates had jobs and sufficient income to pay their student loans which were typically amortized over ten years. Even someone making a minimum wage of $4,000 per year could scrape together the $25/month on a $2,000 student loan, and when he got a better job, he would increase payments and knock it out in a couple of years.
Along come Harvard Med and Yale Law students who rack up $25,000 to $30,000 student loans. Some get jobs paying enough for them to cover the nut of $300-$400/month, but others figure out that if they join the Peace Corp or volunteer to work for legal clinics, their income will be low enough that they can get their debt discharged in bankruptcy. So they start out debt free after two years of volunteer work is added to their resumes. Their parents were willing to subsidize their two years of volunteering, but why should they pay the student loans when their darlings could just shed them in BK?
The elite managed to get the law changed such that not only do you have to be unable to pay your loans today, you have to be so disabled that you will never be able to pay them.
2
The problem could be largely solved by protecting student loans from bankruptcy for a certain period of time after graduation, say five or ten years, rather than in perpetuity as the case is now. Then if some Harvard law grad wants to hide out in the Peace Corps for a decade, escaping his debt but also foregoing a big law job with a starting salary north of $200k, I say more power to him.
2
In 2005 my daughter signed loans that a private institution assured her were for less than $30,000 at 2% interest. They lied.
She realised she needed to be part-time and work, but needed a 40 hour a week job to support herself. School had to be dropped.
She investigated, but not all the agencies could/would show her paperwork she'd signed to justify the loans. Regardless she started paying
They then swapped the paperwork to different collection agencies in 3 months, and never informed her.
She can't go back to college without the transcripts from this institution, which they won't release because she hasn't paid the loan.
Forgiveness would make a transformation in her life, and as she wants a social work degree, in the lives of others too.
1
That’s not how real student loans work. It sounds like your daughter got scammed by an unscrupulous place only pretending to be a school. You should look into legal remedies, seeing if your local government can help. If this place scammed your daughter then it must have also scammed a lot of other local people.
"These kids that you won't pay for, are the ones that are paying for the social security you will collect and they will never see."
With the gerrymandering decision today, all the conservative judges, and now the mechanism to destroy Social Security. we may well be bidding a sad farewell to the country we loved.
2
That is kind of a silly headline, yes?
Of course canceling student debt won't make problems disappear. Only a fool would think it might.
Its the classic Right rejoinder to everything Left; gun control, healthcare, opioid epidemic, economic inequality. You name it, whatever issue you have (and Liberals have a lot of issues...not that I'm saying you're wrong) there is no solution worth trying, no solution that doesn't prove how elite and disconnected you are, because there is no solution that solves the problem. Completely.
But cancelling student debt, and structuring things so it doesn't recur, solves a raft-load of problems at one swipe, maybe most important its a strong push to get the US economy out of the monopoly-dominated mud into which it is currently sinking.
That's nice enough, but you would think Pelosi and others on the flighty Left might want to learn by example.
Take our President. All the man has ever done is complain about allies. About money, about military support. About trade. About there reticence at expressing their deep-seated love of him.
So what's the answer to this complex situation? Easy peasy.
Trump runs down, denigrates, lies to, slaps bizarre tariffs on, threatens to disclose intelligence of, mocks, and demeans every ally and trading partner we ever had while making sweet public love to The World's Most Wanted.
Poof! No allies...no problem.
Watch and learn, Lefties. Watch and learn.
There is no student debt crisis!
At graduation from college students who have taken on debt owe a bit less than $30,000. According to Georgetown's CEW the bachelor's degree they bought will be worth $2.8 million over a lifetime -- or 84% more than a high school diploma.
The median student debt payment is $222 a month, around equal to the lease payment on an average car. At 4.5% interest the debt will be paid off in 15 years.
Yes, for-profit colleges -- in cahoots with the federal government -- hornswoggled many unsophisticated students, and these debtors deserve relief. We could require the federal government to pay off the loans of those who can show they were defrauded.
Warren and Sanders are in a fight over college educated millenniums. Their claim that there is a crisis is based on reports by media which only publicizes worst case anecdotes.
There is no crisis.
3
@ellen1910
Bill Clinton was paid $1 million per year for a ceremonial position on the Board of Directors of a for-profit college chain that did not require any services from Bill but gave them the right to use his photo when recruiting students. The students were eligible for taxpayer backed student loans. He resigned the gig when it became politically incorrect to support for-profit colleges and Hillary was getting ready to run for president.
It is very likely that some for-profit colleges have been guilty of misrepresenting the value of their services, of charging more for tuition than its value, of having inadequate instruction, blah, blah.
The Obama administration launched a public assault and enforcement actions against several for-profit college chains, driving two of the biggest out of business. They cited high loan default rates as the justification, plus the facts that many students didn't complete their programs of study and still owed tuition or didn't get higher paying jobs despite having to pay student loans.
Over the winter holidays when no one was paying attention, the education department reported that the statistics for community colleges were indistinguishable. Which makes sense, because the two systems draw from the same pool of students: those who do not qualify for admission to four year colleges.
@ellen1910
Part 2.
Students from the fourth tier of higher ed [for-profit and community colleges] have the highest default rates on median loans below 5k. If 100% defaulted on their entire balances is would represent less than 10% of student loan debt, and there are enough successful students that there is not going to be a full default.
Denying loans to these students means that the poorest of students are denied the chance of bettering themselves. They have zero chance of graduating from Harvard and becoming president. Let's deny them the opportunity to be an office manager or regional manager of a McDonalds chain and sending their kids to Harvard.
This is a government program without time proven credit considerations and controls. The results are predictable, a negative return of investment for many borrowers. Differing from a commercial loan program, this government program is funding an inordinate amount of the negative returns on investment, measured in delinquencies and defaults. And differing from commercial practices, it is not self-correcting, there are no checks and balances. Ironically it far exceeds anything a commercial entity would be allowed by government regulators to do.
The campaign promises of student loan forgiveness are a flagrant attempt to buy votes with other people’s money. And it does nothing to address the root cause of the problem — fundamentally bad policies and practices.
5
The unintended consequences are immense. A truly safe and useful plan is much more complicated and nuanced. But, that won't sell. Sanders and Warren are bulls in a china shop.
6
This is really just a entitlement program for tenured ivory tower professors. Just image your tax dollars subsidizing this. One is reminding of the great quote;Warhol?' "Those who can't do, teach. Those who can't teach, teach gym".
2
Students aren’t graduating in 4 years, or 5 years.
Their loans are paying for 1-2 extra years of housing, and over-priced food (on campus), and fancy gyms... not education.
Throw billions at this and nothing is solved.
3
Wow this is so off base. We forgive student loan debt because it's currently at $1,600,000,000,000, 1/4 Americans are affected by it and it has the potential to destroy even basic quality of life for most Americans. We should make this decision and then make sure that it doesn't happen to this level again.
I suggest a commission to study how we allowed this much debt to accrue and to suggest an exhaustive list of possible steps to prevent it in the future.
Not acting, doing nothing, sitting on our hands because we cannot fathom a way forward is on par with starving to death because you cannot figure out how to bring a spoon to your mouth. Let's get this done people.
4
Student debt is clearly out of control. This will have significant and perhaps dire consequences on graduates future buying power and our economy.
Some suggestions:
1) Gain one year of tuition-free Public University for every year of public service employment (nursing homes, hospitals, environmental services, park departments, etc.). This may allow college age youth to see what work and a modest salary is all about and appreciate that there is no such thing as a "free lunch"! Nullum prandium gratuitum!
2) Improve tuition-free education programs for the military...these folks put their lives on the line for the greater good of our country and deserve better benefits than others.
3) Follow the example of Purdue University to hold down costs for students through economy measures. Reduce the number of academic administrators. Excessive layers of administration in many institutions have expanded beyond a reasonable measure. Too much administration in lieu of teaching faculty adds to costs while not providing more "product" ...a college graduate!
1
"That’s because most student loan debt isn’t taken out to attend undergraduate programs at public colleges and universities. Most loans are used for private colleges, for-profit colleges and, most of all, graduate school."
This is not an unintended consequence. It is simply that the proposals don't cover all educational expenses. It is much more important to cover undergraduate public education than private or graduate education.
The solution is straightforward, make graduate and Ph.D. programs tuition free as well.
The author raises a good point that people who already have paid their loans are lottery losers. My parents put aside a great deal of money so that they could afford to put their children through college. Lets reimburse them too.
The American Dream demands that every person be given the opportunity to rise as far as their hard work and determination can take them.
For too long American Universities have been in dereliction of duty. Denying capable applicants so that they may maintain the self-fulfilling prophecy of low acceptance rates, exploiting young athletes for billions, all while skyrocketing tuition. No pricing power for universities? No problem.
How do we pay for this? Setting aside the argument that it is the morally right thing to do, think of it as a smart investment. The encroaching climate disaster requires a highly educated population to stand a chance of being solved. Let's also not forget the income effects, perhaps millennials could buy a car or play a round of golf if they weren't saddled with crippling debt.
Can't be done? Germany is doing this right now. Free education at all levels, no matter who you are, no matter where you are from. I have met some bright minds who were accepted to US universities, but they felt that the offer from Germany was too good to pass up.
It's time for America to experience the American dream.
4
@John- I attended a free PhD program (I earned a small stipend, in fact). The program was in the US and we had about 40% of the students from the US. I currently have a high paying job and acquired no graduate degree debt. The good PhD programs are already free.
2
Certainly in my department, and other related ones,
We don't charge graduate students. We PAY them, and much more than a pittance. Perhaps students in the unemployable Humanities fields have to pay, and those in the very employable law or medicine fields have to pay (oh wait! many of the ones in the med school across the street from my office don't have to pay!), but its up to them whether they go to such schools.
My upstairs neighbor just graduated law school. He said he would repay his debts in two to three years with his salary. One of my grad students married a lawyer. She worked hard 7 years and built up such a big nest egg that she decided to become a (very high end private) school teacher.
Its all what you plan for.
Nevertheless, I do agree that these high debts are scams, and I would agree, despite my strong Republican leanings, that government action, even if it costs tax money, should be taken.
Why exactly should 'Wall Street' be the hook for the 'education' of millions, many of whom would do better in apprenticeships learning a trade? Wall St will merely pass on the costs to consumers in the myriad of products they peddle. As for the bank bailouts during the financial crisis, all that money was paid back to the US Treasury with interest...the taxpayers came out ahead. The institutions of 'higher learning' churning out grads with bogus degrees are the ones who should have more skin in the game!
4
I definitely did not get an unlimited amount of money offered to me through loans for graduate school. Maybe the article was addressing something different but I had to take summer classes and I was luckily able to take extra money in debt during that semester. If I was not able to take the maximum amount offered to me during that semester then I wouldn't have even been offered enough to cover tuition and fees the next fall and winter semester. I had to save money from the summer loan offer because the next semester loans were maxed out.
The details of student loan forgiveness would need to be hammered out but making college affordable for everyone is a good idea.
1
Nor is it fair to those of us who sacrificed to pay off our student debt.
4
Obviously student debt is a problem. And a lowering of interest rates is reasonable. But in real life there is no "free ride." Bernie Sanders is a Pollyanna and is loved by millennials who, in many cases, think life should be easy. It is not. Ask the students and parents who have paid tuition and loans.
Sanders and Warren want to change the rules completely mid-game, which is unfair to those who have played by the rules and paid for school and their loans.
5
@Om
"Sanders and Warren want to change the rules completely mid-game..."
Yes, yes they do.
About time.
2
Many of these students are so deep in debt that they can’t even afford basic necessities let alone loan payments.
I have built my career without taking on student loans. I often look back and realize that with better choices, I might have made millions more, but I'm still widely considered upper middle class.
To forgive student loans on the back of taxpayers like me seems deeply unfair.
How about we just reduce the interest rates. Index them based on current treasury bonds. There is no reason our government should be profiting from these loans.
6
Here's a question: with student debt forgiveness, what happens to the investors who backed the student loans? I have invested in Sallie Mae. Would debt forgiveness wipe out my hard-earned investment?
2
I think we should remember that the expression "pulling yourself up by your bootstraps" is asking you to do the impossible. Try it. Where do your feet end up? Back on the floor they started on. Unless you manage to jump up frontwards or backwards and end up on the next step. But then, somebody else built that step, didn't they? And you don't need to bootstrap it because it's a step that is already there to help you. So loans were supposed to be a help, like a ladder or a staircase, but now they are downward chutes, and not just for the individual student, for the entire family and the economy. Something has to be done. We should start by getting rid of the loan servicers and returning the servicing of loans to the government. That way, the loan servicers would be answerable directly to Congress and the DOE. And don't start talking about how much that would cost. The current arrangement is costing all of us already.
1
In addition to standardizing all public k-12 education to ensure every child gets a good education, we should take the money we are diverting to billionaires who already have more money than they could spend if they lived 500 years longer & stop using massive "defense spending" to funnel taxpayers' money into the coffers of the socialist defense industry (that gorges at the public trough). FICA withholding should not have a cap so that somebody earning billions pays the same as somebody making 128,400 - the 2018 limit (it's going up a bit for 2019). If we stop subsidizing rich corporations & factory farms, create a sane trade policy, & move the highest tax rate back to 70%, where it was when Reagan was elected, we, one of the richest nations on Earth, could afford to pay for public colleges, quality k-12 education, quality healthcare for all. Let the pentagon have a bake sale next time they want to buy a $5,000 toilet seat. Our problem is not that we lack the money to provide for the general welfare (as the preamble to the Constitution promises), but that we misallocate it, giving the most to those with no need & short-changing those who most benefit from government assistance. Oh, and a thought. We should pass a law that says a state's benefits from the federal government should be capped at the amount the state pays into the general revenue. Blue states have been subsidizing Red states for much too long.
4
I spent 4 years earning a degree from an Ivy in the late 1960s without having to borrow any money. Primarily, I worked to earn tuition. I was helped by a bit of scholarship money, but I could have covered my entire education without it. The real question is why the cost of education at all colleges has risen so dramatically faster than the general cost of living. We need means-based Pell grants greatly enlarged & free public college for anybody who can attend & maintain an acceptable grade (even without a HS or GED diploma). If you are capable of doing the work, the country needs you to be educated to your maximum capability. Look at the case of Ben Ferencz, a Rumanian-born Jew who came to America as an infant in 1920. Raised in abject poverty he was able to get into a unique high school in NYC where every graduate was automatically granted free admission to CCNY. He did so well there, he earned a complete scholarship to Harvard Law School, where he specialized in international criminal justice. At 27, he tried his first case, as the chief prosecutor of the Nuremberg War Crimes trial of the Einsatzgruppe, winning convictions all around. At barely 5 feet tall, he had to stand on a pile of books just to reach the podium. He was instrumental in setting up the International Criminal Court of the Hague, was a law professor at Pace University, and today, at 99, still works full time on international criminal justice. We can't afford to lose today's Benny Ferenczs.
4
How about forgiving student loans and free college for Blacks and call it reparations?
2
The NY Post ran an editorial that was much more on target than this one in the Times. The Post pointed out how unfair and elitist this proposal is to noncollege, working class citizens. Why should college students heading to lucrative careers get their loans forgiven when working class folks receive no forgiveness for mortgage, auto, credit card debt, etc.? Furthermore,, as the editorial points out, the greatest debt seems to be for graduate school which is the ladder to the highest paying careers. It’s ironic that the commenters here who support Bernie’s supposed democratic socialism don’t perceive this as a food fight among the privileged 25% of Americans who go to college.
6
@Richard
Bernie, with AOC, has introduced legislation to Cap Credit Card Interest Rates at 15%. Warren has NOT signed on.
Most trade schools, are at community colleges and as long as they are public, not for profit they would qualify for aid/forgiveness.
For mortgages, while mayor of Burlington in the '80s, the democratic-socialist senator and current contender for the Democratic presidential nomination was an early champion of community land trusts. Today, the organization whose creation he made possible—now called the Champlain Housing Trust—is the largest and most influential of its type in the nation.
Community land trusts are nonprofit organizations, with a board composed of representatives of the public, the local government, and the tenants, that obtain land and either develop it themselves or lease it to developers. The trust then removes its holdings from the private market, usually through 99-year ground leases and pre-emptive purchase requirements that limit how much the house can be sold for. Community land trust boosters argue that this not only ensures permanent affordability, but allows the organization to intercede in the case of, say, a foreclosure. An oft-cited study by the Lincoln Institute of Land Policy showed that, as of 2010, homeowners within a land trust were 10 times less likely to default on their homes than their private-market counterparts.
The Champlain Housing Trust is inarguably the most successful land trust in America.
1
Whichever plan, it's still creates a mishmash. Will the huge debt of a student say in Art History from Harvard win the loan forgiveness lottery? Will the debt of a student say in computer engineering off to work at Google win the debt lottery too? While the more frugal student who spent two years at a junior college to keep their undergraduate debt down will lose that lottery. And in practice perhaps even pay for the Harvard, Yale, etc. student's debts.
College tuition is way too high. Debts are way too high but neither Warren nor Sanders deal effectively with the problem. Their plans let one group of students win the debt lottery while others will fund it.
2
People assume that all 18-22 years olds have a parent or guardian that should make sacrifices to save up enough money to send their kid to college. Not everyone has that opportunity or resource. People who have parents that helped them get through college are lucky and in the minority.
People assume that all 18-22 year olds should already have the money to go to college. People should only to to college if they can afford it. How is that possible if 18-22 year olds have only been able to work since they were 15 (part time during the school year, full time in the summer with a minimum wage job)? Usually people can’t afford college, even after saving up for 18-20 years. The idea that 18-22 year old should have the money to go in the first place is ridiculous and it perpetuates the cycle of affluence and poverty.
People assume that 18-22 year olds have a thorough understanding of financial concepts and are fully financial literate. People think 18-22 year olds should understand a six figure educational investment, completely understand the return on investment, and the repayment terms. Who is providing this financial education?
Of course 18-22 year olds take out student loans to go to college. They have been told since kindergarten that it will make them more employable and more likely to achieve the American Dream. Most professions require a certain level of education and experience. How do you get that education to get the job? You take out a loan.
4
So.... are Bernie and Elizabeth going to send me checks for paying the college tuition of my children in full? Nope, they are going to reward people that think debt is the answer to all our worldly problems. The problem here is the mind set that debt financing is the solution to everything. Despite their other thoughts, that government debt is not an issue, it is. As is personal debt. Wake up folks, there is no Santa Claus.
5
Debt cancellations have occurred many times in history. The result is always an economic boom. The real world has had to be the slave to accounting for too long. Debt today functions as a replacement for brick and mortar investment. The moral of that part of the story is to create the conditions where the real world is worth investing in.
Americans are slaves to paying economic rent to the figurative and literal landlord. The privatization and financialisation of the country, both starting in the 70's, means that earned income and public infrastructure have collapsed in tandem. Only the well educated can earn in America and only the owners of property, real and financial, can make a living.
Americans are tired of being born into a position where we have to pay our owners rent for the rest of our lives. This is not what capitalism is supposed to be. It is feudalism.
6
There is no good reason to forgive loan debt for students whose families make more than $100,000 a year. A better idea would be graduated income levels based on family size. A family of three obviously has a different standard of living than a family of five or six on the same income.
We need to provide college opportunities to bright students regardless of family income, but is this the best way to do it?
Make it easier for high school graduates to attend two and four year colleges would have benefit the rest of us in so many ways, from a more educated citizenry and a release from the stifling burden of debt that prevents many young people from being able to afford homes, marriage, kids, etc. Taking the predatory for-profit out of the equation to stifle "educations" that don't yield any benefits wouldn't be bad. Same for applying a "likely to repay" standard to graduate and professional school programs, i.e., we need more doctors but perhaps we could survive with fewer debt-supported MFA creative writing programs.
Here is a very different approach to take and this would make it fair for all who have and still owe as well as those who will become encumbered with student debt in the future: Set the interest rate to -1% (MINUS ONE PERCENT). This will take a substantial burden off those who are responsible and over time release them from the ongoing side of this problem while at the same time holding them personally responsible for their choices. If they continue to make their minimum payments this option will continue to be available and the time of their debt burdens will be reduced substantially.
The real question to me is why has a college education become so expensive. I graduated in 1964, fortunately with a NYS Regents Scholarship, which if I remember correctly was about $1000/semester and was enough to pay most, if not all, of my tuition to a private Jesuit College. Of course books and fees etc were all on me, but a part time job took care of my needs. Some kid today, with a NYS Regents Scholarship, would probably still have to come up with 10K/yr or more to attend the very same school. Where is all the money going?
4
The headline is correct.."it doesn't solve the problem". What is the problem and what solves it?
The problem is the loaning of money for interest. The solution is canceling the interest portion of the debt. Principal to be repaid. Interest owed (and paid) to be deducted from remaining principal. Refunds of interest paid on cleared debt.
Then, instead of "free college" people should be paid to go to college, like the Vietnam era GI Bill. I would go further and say that students should be paid to go to school beginning in the 1st grade. I know of one grandparent that pays his three grand kids $3/day and keeps the balance in a go to school account that they can access at their discretion. All concerned seem pretty happy about it.
If the loans were interest free, or if only the interest on the loans were forgiven, that would go a long way in offering relief to student loan debtors.
4
Perhaps the only benefit resulting from either of these utopian plans is that, should Warren or Sanders be nominated, young people might finally get out and vote.
@Maddy Williams
I hope they act like adults and, even if their favorite is not the nominee, they will neither sulk nor stay home but instead get out and vote.
1
@Franco51 I sincerely hope this goes for everyone. There are a lot of dems insisting 'never bernie' but I have yet to hear anyone encourage them to just vote for the nominee no matter who.
The IRS considers debt forgiveness taxable income, a bit more complicated than a 78 year old mind can come up with. What then Bernie? Change the Tax Code? And where do you draw the line? Carve out student debt only? And what if the debtor would rather continue to pay off said loan rather than borrow more money to pay a huge tax bill
These candidates appear to be running for Student Council President, not the leader of the free world.
2
So, we bit the bullet and sacrificed so that we could pay for our son's education through law school instead of taking out a loan. Were we stupid to lay out that quarter of a million for being, what we thought at the time, "responsible citizens?" Remember there are LOTS of us who lose with this one.
3
@Tricia
Yep. This makes suckers out of those parents and kids who acted like responsible adults. It rewards irresponsibility and punishes thrift and hard work.
Exactly the opposite of the message we should be sending to our kids.
4
@Franco51
This way of thinking mires us in the bog the states and the Feds created when they took education money and blew it on tax breaks, the military, and for-profit diploma mills.
You can't make education policy by forcing everyone to live by yesterday's standards.
Social security had to start somewhere. A generation of responsible people "lost out" when the alternative minimum tax and others came into play. Would you object to decreases in taxes because your mom paid more?
I don't see rich guys complaining about their trillion dollar Federal gift because they paid more last year.
You're forgetting the net, society-wide benefit of creating a more educated, more active, more successful citizenry.
I'm sorry you feel that you're losing because someone else gets stuff. It is what it is. Deal.
3
@Tricia The Dems make suckers of all of us who worked hard, paid our bills, paid loans (student and otherwise), and scrimped and saved for retirement. We are the idiots.
It's still a great start. And in a country that erroneously calls itself "Christian", canceling said debt ever seven years would be the Biblical thing to do.
The objections raised in this piece are ludicrous.
6
The author fails to understand that canceling the debt will be a boon to the economy. This article is so disingenuous.
If America can bail out the banks to the time of 7 trillion dollars, it can afford student loan debt cancellation.
For those who do nothing but complain about higher education, you opinion falls short of understanding what is at stake here.
7
I'm opposed to cancelling student debt. I paid substantial portions of my daughter's and grand daughters. Will I get that money back? If we are cancel anything it should be the exorbitant interest.
3
When my children were born I looked out 18-22 years and saw a college education expense that I meticulously funded by saving, controlling expenses and in the end I was able educate my three children without burdening them with loans. Along the way I drove less expensive cars, kept the same house and never bought a lake property, but I watched a boatload of similarly situated families in our school district buy bigger homes, incur mortgage debt and never save anything of meaning towards their children’s education. So those families relied on the federal governments increasingly liberalized student loan policies and loaded the kids up with debt.
Now Bernie and Elizabeth want to eliminate the debt of the Starbucks coffee drinking generation and furthermore have them not realize any income taxable results from this debt forgiveness.
These neo-socialists are like thieves in the night robbing from the financially prudent to support their voting base with “free money”, and you have to ask when will we ever make people be responsible for their decisions and stop penalizing the prudent taxpayers?
3
It would be best if Federal student loans were completely forgiven. Here's why: When college graduates have to make student loan payments, that takes money out of the economy. If the loan were instead forgiven and the money spent, the government would get the loan repaid by the multiplier effect of spending that money, by the taxes paid, and by the increased income resulting from the college degree.
As an example, suppose the graduate has to pay $500/month of his take-home pay to repay the loan. And suppose the average tax is 20%. If that money is spent instead in the economy, there would be the following multiplier effect: The recipient would get the $500 and pay $100 in taxes. He or she would then spend the remaining $400. The recipient of that would pay $80 in taxes, and spend the $320. The next recipient would get that, pay $64 in taxes, and spend the $256. And so on.
Money spent continues to circulate; it's not like taking it out of a piggy bank and it's gone.
Take all this through, say, 15 people, and one ends up with a total tax paid of $382, and an addition to the economy of $2430 - all from the original $500. So the loan payment deficit is $382-$500=-$118. But if the graduate makes another $600/month due to his degree, he will be taxed $120 (again at 20%).
So, even if the loan is forgiven, the government gets its money back, albeit indirectly. And everyone benefits from the added money injected into the economy.
3
First, change the rule that prohibits discharge of student loans in bankruptcy. Then, instead of having Wall Street bail out student borrowers, put the loans back on the universities whose tuition has ballooned. The very existence of student loans has permitted tuition at private universities to rise to astronomic levels.
2
The average debt load of new MDs 15 years ago was $280,000. Many of those new MDs were women, who were more focused on starting a family after all their years in school and residency than they were focused on starting a medical practice. How cost-effective is that?
Student load forgiveness is entirely unfair to those who PAID their loans back or worked and PAID for college in lieu of loans.
The ready availability of student loans was supposedly about “fairness”. The capacity of the educational system to crank out un-employables holding watered down degrees became enormous. Education is supposed to be job skill training. It has become extended adolescent vacation at a luxury resort.
Student loans should be written under the same restrictions and guidelines of getting a home loan of a business loan. They should be capped at a low level to prevent colleges from predatory pricing and lenders from predatory lending to avoid putting runaway are on the backs of taxpayers.
Need financial help for college?
Then complete a military enlistment and use the GI Bill.
4
These proposals are totally unfair to those who have already paid off their large loans. My children attended college from 2001 to 2007, and I just finished paying off the loans. Sanders or Warren can send me a check for $100,000+.
3
@Rich
Totally unfair in the same way that my property taxes paid for your children to go to their schools? I don't have kids, why should I pay for yours or anyone else's to go to elementary and high school? Doesn't sound so nice when its your kids does it?
I attended an almost free public university. For many of us it was a stepping stone up. However, the university system had academic requirements for admission. Those who couldn't meet those requirements, but wanted a college education went to a public community college and met the standards to transfer into these universities. Since these universities are supported by instate taxes they should be free only to instate students.
Choosing to go to a private college should not be supported by taxpayer money, but proving lower interest rate loans would be a good plan. I am a parent of children who attended public or private universities and a child with loans..
1
How about just giving everyone who went to college a lump sum payment? This would relieve the debt burden of those who took out loans (whether poor or poor money planners) and repay/reward those who took out fewer, if any, loans (whether affluent and/or good money planners and/or parents depleting their own retirement funds), who may feel cheated if loans which they didn't take (possibly to the detriment of their quality of life now or later) are forgiven for those who did.
2
Loans from bona fide educational institutions finance a valuable education. The student has benefited, and to forgive all such loans would mean that students have gotten something for nothing. This lack of accountability is unwise, and the politician who advocates a blanket forgiveness is merely pandering to a portion of the electorate. Partial or total forgiveness is justifiable in some cases, such as a student's entering teaching or some community service where salaries are lower than what the student might otherwise earn.
I would support expansion of low-interest student loans, with repayment terms scaled to the graduate's income.
There are some "For Profit" entities that are set up for the primary purpose of making money, and the education they provide is merely for the purpose of creating a pool of customers or borrowers. Trump University is an example. Loans made to attend such an entity should be void or voidable for fraud or other grounds.
3
Here's a thought... why not just cancel the interest portion of all existing debt, make all repayment income-based with a 20-year forgiveness plan, and make all future government-secured loans interest-free... while still working to severely reduce or eliminate tuition at public colleges and universities? A program along these lines holds existing borrowers to their commitments while offering some sane way eventual way out that is not life-destroying (I'd argue that if you knowingly borrowed $150,000 to get a lit degree, you had to have some idea what you were signing up for and should own that) and does not destroy the incentive to attend private institutions but makes attendance more likely at public ones for people of severely limited means.
5
In the days on Tammany Hall, local pols went around handing out free money on election day to buy votes. It seems the tradition lives on.
There is very little discussion about what happens to the people who made the loans to students. Will Sally Mae bondholders, including most of the nations pension funds, face defaults? Will the federal government pay off these bonds. If so, at what rate? Bonds bought years ago at higher interest rates than prevail today are valued at a premium. Will the government pay them off at their current value, or just their face value?
Free education is not free. Ask any middle-class suburbanite when he/she gets thier school tax bill. Property tax funding of free college will become the logical extension of funding free high school. This will become an additional heavy burden on the middle class.
The payment of student debt should be by the STUDENTS who took out the loans. If they did so foolishly, so be it. What is next, forgive everyone's credit card debt?
2
Students take on huge debt in America for the same education that in much of the developed world would be much reduced if not free.
Societies that care about an educated populace leading to advancement in science and the humanities show it in their educational opportunities.
6
The existing debt is a huge problem. There is, however, a potential fix for future debt. The Federal Government should limit the guarantied payment to the lender in the event of a default to a fixed amount- say $10,000.
Within a year, massive so-called "...private...": loans would be capped at that number. There would be an immediate reduction in tuition at many non-top 20% schools inorder to get the students whose loans were so limited.
THoi is how life used to be until Bush Junior did his massive corporate giveaway to the banks as regards tuition loans.
2
If student debt is cancelled or reduced, look for an explosion of entrepreneurial energy -- new businesses & investment, eventually reflected in jobs and stock market. For that alone, it's worth doing. It's also worth doing for intergenerational equity -- the cost of my 1963 degree was nothing compared to today's overbuilt and sometimes predatory educational institutions.
3
@Bob Moore
So, how would paying off everyone's student loan in any way help to reign in the "overbuilt and sometimes predatory educational institutions"? Wouldn't it just embolden them to keep increasing their tuition since it's likely the government will pay off everyone's student loans in the future?
Also, why would this create an explosion of entrepreneurial energy?
Until the law is that schools charge everybody the same amount, grants are given only for being in the top students, or for things like R.As and T.A.s, and outside scholarships are not subtracted from sholarships, nothing will really be better.
Do that and the listed ... and paid ... tuition will drop to reasonable values, and only students who will really benefit from more educations will get it. We really are, at present, urging people too low on the intelligence ladder to go to college.
Are Bernie and Elizabeth also proposing to wave the tax impact on the debt forgiveness?
Generally, if you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes.
They need to address the tax impact of their plans
3
Student loan debt shouldn't be cancelled, it should be managed properly, possibly through government intervention.
Cancellation in turn for some level of service perhaps, but seriously just letting people off for their bad choices? I get that some of the lenders are usurious but did these people just sign on the dotted line without considering the long-term implications?
Paying $200K for a degree in something one is passionate about is lovely but you still to think seriously about where that money is coming from and how that impacts the long run.
I think that today too many people have envy of what others have because it is in their faces all the time. Yes, I understand that they are struggling to pay it off but what were they thinking? I was broke until I was over 30 and didn't buy my home until I was past 40 and I have degrees that are actually "employable". It was tough but we made it through.
5
This is pandering for votes, plain and simple. The issue is it helps upper class kids who could get into college. How about putting the money where it is needed? Revamp our elementary and secondary education system in the poorest districts, pay teachers, provide kids who have NO shot now with an opportunity to get technical training or to be ready for college. Use the funds to make a generational and lasting change that will set the country up for decades to come.
5
Thank you! I hope every voter reads this article.
Not included in this discussion is the middle class family with say two children who follow all advice & start saving for college when their children are small. They limit their spending, take few vacations, ask grands for contributions to the college fund as Birthday presents. Eventually they have enough to pay for public colleges. And...the people who do not follow this plan, wind up by borrowing & then having their debt forgiven. Who pays for the debt forgiveness? The rest of us. (Bernie & Elizabeth can’t pay for everything by taxing Wall Street)
Restructure the debt but require repayment.
6
Some of the optimistic comments that I have read here reveal a more humane definition of "socialism": the benevolent attitude one debtor has towards another or future debtor. For example, many commenters here who have been saddled with student debts and have struggled to pay them off state that they don't want others to struggle like them. This is good socialism. How refreshing to read this unlike the comments of those whose struggles to pay off their debts have made them embittered and churlish towards their co-debtors. The latter seem to justify paralysis just because they managed to get cured whereas the former in a rational manner seek to remove the cause of paralysis itself.
3
It took many years, at a time of low earnings, to pay off my student debt. It was hard, I made many sacrifices, but I had an obligation to pay this and finally did it. I lived at home, commuted to college and never worked less than two jobs in order to keep the student debt as low as possible. To now be asked to use my taxes to simply pay off the student debt of millions who made the same committment I did is a hill to die on for me. The politicials call blanket student debt forgiveness a "revolutionary proposal" and I certainly agree.
4
It could be that the costs of an adequate education in our society need to addressed and not student debt.
Why should I agree that $100.000's of dollars of debt should be forgiven so people who become Doctors and Lawyers who prey on people with exorbitant fees, own two or three houses and vacation in the Caribbean while others work their way through college and their parents spend their savings to help them.
I think loan forgiveness is a socialist debacle and should cause many to abandon the liberal ideology behind it.
The system needs to be addressed not the debt.
All that being said I listen to the ideas and plans that the liberal candidates always preach before an election and guess what; if you do not control both the House and the Senate very little in this country will change as was evident during the Obama Administration. When the Democrats address this issue I may believe that they have taken off the rose colored glasses and realized that they must address their politics before assuming that they can change the world.
1
One of the unintended consequences of paying for graduate school is that we will not have a consistent pool of graduate students to teach undergraduate lab and discussion sections. At least in the sciences, these jobs cover tuition and provide a modest paycheck.
1
Most people, including the author, think that medical school is graduate school, but it is actually considered undergraduate education. Nevertheless, some medical schools, took advantage of the new direct federal student loan program and raised tuition. Now some medical students leave medical school with $400k to $500k in student loan debt. Students that get married in medical have a combined debt of over a million dollars. Couple this with the debt they accumulated from earning their bachelors degree and you have an unimaginable student debt burden. The administrative rational given to students is “you’ll specialize in ___, so you should be able to pay it off.” The problem is that not all medical specialties pay the same and you cannot easily switch specialties to readily pay off your debt. For example, an infectious disease specialist is going to make a small fraction of what a cardiologist makes. It’s predatory lending. The only physicians that come out ahead financially are the top paid specialists or foreign medical graduates who were able to bypass the bachelors degree requirement and paid $10,000 for med school. The rest of us are suffering.
3
Every time I read about Sander's and Warren's stupid proposals I am infuriated. Many people did without to save for their children's college education, instead of spending the money on lifestyle or retirement savings. Many people worked to put themselves through college. Other people decided not to attend college because they could not afford it. So now, these two think that it is fair to forgive all student loan debt? This is one of the reasons why hardworking people who are Democrats refuse to support these two candidates.
4
Why is it ok to bail out irresponsible corporations but not the little guy conned by for profit "schools," like Trump University. The student loan program is a ponzi scheme. Once you have accumulated debt through it, it is harder to pay off than a mob loan. Fees, penalties and interest keep you chasing the carrot until it makes you sick. Absolutely scrap it and start again, this time sensibly.
2
Terrible idea as presented.
It teaches irresponsibility. Kids and their parents will run up as much debt as possible since it’s never gonna need repayment. Why would they do otherwise?
Meanwhile, those who worked hard to avoid debt and pay off the debt they did run up—acting like responsible adults, the sort of message we Should send to our kids—get played for suckers.
Let everyone be required to pay off the first $25,000–50,000, then help them with the rest. Alternatively, offer the chance to work it off with a year or two working in underserved communities.
Free Rides create Freeloaders.
7
Such a plan incentivizes irresponsibility. Kids and parents will run up as much debt as possible, even if they don’t need the money. Why wouldn’t they?
Such a plan punishes hard work, thriftiness and adult behavior. Those who work hard to avoid debt, and to pay off debt they do have, will be played for suckers.
At the very least, require that the first $25,000-50,000 be paid back, then a smaller part of the next $50,000, etc. Someone who truly can’t pay it off can have the rest forgiven for working in an underserved community for a year or two.
The plan sends exactly the opposite of the messages we want to send to our kids.
1
What we need to do is to teach students how to learn skills by themselves by taking MOOC courses from the internet. What do teachers like me do? Repeat teaching the same courses again and again. Instead they take the courses taught by good teachers already available for no cost like the Khan academy. We make a small donation to Sal. This will reduce the cost of education. Certification can be done via SAT-like tests. There is no need for these loans. Who makes money from these interest payments? This is common sense.
Dems can't seriously believe that the Congress will support Bernie's proposal to forgive $1.6 trillion in student debt, can they?
The Dems should remove Bernie from the race, as he is now time wasting.
3
I've been to my alma mater, a private university. I've seen how ridiculous it has become. Its a country club now. Taxpayers should not be funding these country-club college campuses. Private school tuition debt should only be forgiven for the level of their public school counterpart. These private universities and their exuberance disgust me.
5
Next step in the grand plan, loans for elementary, then secondary schooling. Then loans to pay for graduation. Then loans to pay for not having enough loans. The point is the money lenders want debt. And they'll do just about anything to get it. They've corrupted education, then politics, then family life, then whatever else they want. Let's change the words of the Tennessee Ernie Ford song, "Sixteen Tons,"
Saint Peter don't you call me 'cause I can't go
I owe my soul to "JP Morgan Chase"
3
it does for those suffering under this unfair system.
for a century reach generation bore the burden of paying for the education of the previous generation.
and they promise if a good education makes the debt worth it, but only just.
also, 18-22 year olds can't rent cars but they can take it $$$$ in student loans, hmmm...
1
Really Kevin Carey? Only 45% of student loans are used to attend public colleges and universities? Only 47 percent of master’s degree borrowers and 27 percent of Ph.D. and professional school borrowers would have all of their loans forgiven? In both cases that is almost half, and for the Ph.D. borrowers a third! Certainly not insignificant!
3
Another issue that could be solved by taxing the top 1% appropriately. Actually, that's the only issue any newspaper or forum or TV show should be discussing is how to stop further separation of income. $15 an hour is enough to live on if you are 18 and don't plan on having kids or any savings throughout your whole life. Hope you don't want to eat too healthy either. (Amazon). Concentration of anything besides soap has bad consequences for the ones that aren't being concentrated.
2
The fair solution here would be to just significantly inflate the economy by giving every living American $25k every 5 years, with a phase out based on earnings around $1m. If you already paid off your debt (cause like me you choose the un-fun route and went to a commuter school), here's money to go and get those experiences you missed out on before. If you still have debt, here's a chance to pay it down. And it can be for any debt, maybe a car or a mortgage. But will still have losers with this because we just raised the cost for everything.
1
The EW plan isn't supposed to alleviate private debt. It's only to help public entities.
1
Student loans are financed by for-profit enterprises, aka businesses. Remember when you could earn your way through an excellent state university with part-time and summer jobs, and state universities were financed by taxes and modest tuition? Remember the G.I. Bill? When did the student loan enter in? Remember when higher education was one thing, job training another? Not any more. Hence the rat race to get into colleges and universities, plus their prohibitive cost, and the consequent student loan catastrophe.
What if education and job training were financed by a combination of tuition plus state and federal taxes? And what if all students were required to put in a year or more of service - federal, state, municipal, military, occupational, or business service - in order to graduate? What if a student could finance a complete education through service? What if elite educational institutions were not tax-exempt? If health care is a right, why isn't education ? When, why and how did education and health care become business enterprises?
Remember FDR? Bernie Sanders and Elizabeth Warren do, while Trump uses immigrants as scapegoats to distract us from the fact that robots and computers are replacing human beings and that thanks to greed, fear, ignorance, and exploitation our species is as vulnerable to extinction as any other.
As long as we can vote we can choose - right?
Just wondering.
1
Again, the problem here is that people view education as a business opportunity to make money. They shouldn't. Like healthcare, it should be an investment in the wellbeing of the country's citizens.
For example, the growth of private and for-profit schools was supposed to make the industry more efficient and cost-effective; you know, the whole "magic of the marketplace" thinking. Well, over the past 40 years, here's what happened to the cost of higher education versus two other essentials:
Food +244%
Medical +600
Higher education +1,120%
3
Bernie Sanders and Elizabeth Warren never claimed that they are going to "solve" that problem. Through student loan forgiveness they plan to alleviate the heavy burden of debt that young graduates have. Do you know anyone who would prefer to pay her student loan rather than have taxpayers pay for it?
A commenter (hen3ry) gets it. A high school education used to be enough to qualify for many good-paying jobs, jobs that then trained the employee.
Then we required college degrees as if that were paying one's dues.
There are many good jobs, careers, that require learning but not college education, per se.
The educational industry is the big beneficiary. And it's a racket.
Perhaps the author is aware that the process of implementing the Warren plan or the Sanders plan will include appraisal of the situation, taking into account those consequences. Of course many things need to be considered, including how to keep debt cancellation from being a way to raise private college tuition even higher instead of cutting back on the amenities that are out of control. My husband and I have been under Navient's thumb since our daughter's second year of private school eight years ago. Why should education be a profit center?
Education cost money. Even the wisdom that comes with age cost something, the school of hard knocks isn't exactly free. Could there ever be 'an education bubble'? Education seems to rival pharmaceuticals as a solid cash cow. I remember when people thought it great that a public education through high school prepared one for citizenship and a career. Now the assumption is it's a preparation for college, where the difficult choice of graduate school is mulled over. Robotic fryers at fast food establishments, robotic floor cleaners at the supermarket. Fear adds to hope; the default: more ejamacashun. Then we'll find our place in the world. But, gosh, the cost is starting to amount to real money. Government has deep pockets.
Back in the 60s (yes, half a century ago) the $60 my Dad shoved in my pocket as I drove away from home to become the first university student our family (immigrants in 1858) had ever had, along with 3 days-a-week work at minimum wage ($1.25/hr then) pumping gas, paid for my State university tuition, my dorm fees for room and board, my books, and even an occasional "time on the town".
My family was too "rich" (my folks still had a home mortgage) for me to qualify for what passed for "student loans" in those days.
When I got to University and was living in the dorms, I was astonished. I thought all university students were like my best friend and dorm roommate --- their parents paid for everything.
But here was a hotbed of "pull-up-your-socks" students working to get an education.
You can't really do that today. I ran the numbers, and, at minimum wage, a potential student would have to work 50 weeks full-time just to pay tuition at my State university.
But I also don't think advanced education should be free. It's like the guy I bought my kitten Raja from in a Walmart shopping center parking lot: "If he was free, you wouldn't value him and care for him as much as if you paid for him."
I send money overseas to help children buy basic school supplies and pay their teachers. I've been there, seen that, worked there, own the t-shirt.
Americans need to decide where their values are. My Dad knew when he spent 2 years not smoking to hand me $60 the day I left for university.
1
Upon reflection, I'm glad you brought up graduate school tuition. I think we need to differentiate the different types of graduate school a little better though. Mr. Carey makes passing reference to various academic tracks. However, if we're going to lump 40 percent of student debt into "graduate" debt, I think a little nuance is appropriate.
The way I see things has four different categories. Law, medical, research and professional. The professional track is further subdivided into business professional and non-business professional tracks.
Medical and law appear self-explanatory. These are fields that require advanced degrees.
Research is academia. You probably shouldn't pursue a research/education career unless your desired goal is tenure. In which case, the school should be paying for you to attend school, not the other way around. Trust me, a doctorate isn't going to pay well in most fields but you shouldn't leave school in debt.
That leaves professional degrees. The first question you should ask before even applying is ROI. The fact of the matter is most professional degrees don't pay. You're punching a ticket. I haven't met anyone born in the past 30 years who hasn't regretted the price tag on a professional graduate program. Essentially: If you can't learn it on the job, you're essentially paying for job placement. That's it.
I'll venture to guess most graduate debt falls into this category.
Bernie's plan has other unintended consequences: It encourages bad behavior, namely not paying off your debt hoping the government will bail you out, and choosing to study something for which there is no market because you don't need to pay for it.
Student loan interest rates should go down to what the US government pays (as Warren has suggested). Tuition should be free so that the cost of study is the cost of living. Student loans should be reduced to their original (before compound interest), people who have paid off their loans should get their money back, and then all loans should be reduced by 50%.
This encourages could behavior and discourages bad behavior.
Actually, canceling student loan debt WILL make a lot of problems disappear.
3
Analogy: You're 18 and walk into a car dealership. They agree to sell you any car you want no matter how expensive.
Despite having no job, and zero credit history, they say you can start driving it now and begin making payments after you get a job. They sell you that new BMW 750i at $97K before tax, fees etc.
That's almost exactly what we do now with college loans.
If you are accepted to a college, you won't be denied a loan.
So any wonder why so many students are in over their heads.
4
Also about the "I did this, I did that frugally it's not fair to me" Times change and that's part of life. Any invention that has taken the place of a human worker, that worker said "this isn't fair to ME" yet the other people that weren't in that same boat said "Oh this is so cheap since "said" invention came along" Times change, selfishness seems not to though.
1
"The German system sets up an awkward situation: The taxes of people who forgo college help pay for the education of those who attend."
This is obviously true. The taxes of blue collar families pay for the education of white collar families. Dems make, imo, a mistake in logic: college graduates make more money, so if more people can go to college, those people will make more money." But a kid who doesn't really want to go to college, but does because it's free, may not finish a program, or end up doing something unrelated for a career. Also, choice of major matters; going to college just to go may end up with more people having college degrees, but that doesn't mean they'll be more desirable to employers who are increasingly more interested in experience and skill set than a piece of paper. It seems to me that providing free college would unintentionally incentivize more kids going to college just to party and have fun, then drop out after a couple years and do something else. Some would find a vocation, but why others should pay for that isn't clear.
1
College is expensive because:
1. Some of us pay the asking price in full, and would pay more if we had to because we have the means.
2. Most do not pay in full, because they cannot, and the govt makes up the difference (but many fall between 1 & 2 and cannot afford it at all).
3. If colleges raise tuition, I will pay more, but those getting aid won't, because they can't, and the govt makes up the difference.
4. The govt destroys the market forces. Those who are not paying in full have no incentive to chose cheaper schools or to forgo college if they do not need it because it is cheap. The govt is the big white elephant.
I wonder what would happen if the govt announced "no more federal financial aid" to private colleges? I bet tuition would plummet across the board because schools could not fill the class with qualified students.
Same issue with healthcare.
5
I have significant issues with a blanket forgiveness.
My son had loans for both undergraduate and graduate school. After years, he has paid them off - by living a very austere life, by support from his family in many ways. It also included the use of money given him by grandparents originally intended as a down payment for a house. To help with some of these expenses I have worked well past retirement age.
We begrudge him none of this, admire him tremendously for his hard work and determination - including his determination to meet the obligations that he freely assumed.
This has put him at a significant disadvantage compared to those who have failed to meet their own obligations and the financial effects of his doing the right thing will be long lasting.
I do believe that higher education is far too expensive and needs to be brought down, I do believe that we must be able to offer an economy where it's possible to combine work and education reasonably so that college is affordable for all. I do believe that there needs to be mechanisms where those with onerous student debts can convert them to loans with reasonable terms and conditions. I do believe that all who were promised debt relief by working in teaching or other occupations need to be freed from "gotcha" provisions that void the promise.
I just can't wrap my head around blanket forgiveness without reaching back to cover loans paid off over the past 5 or 10 years. I realize that seems selfish but...
12
@Bill
I don't feel sorry for anybody that is under the burden of debt from a private college. At the same time, I think public institutions should have much lower tuition. Even free for those that make the grades.
2
I'd love to see an in-depth article critically looking at candidates' plans to pay for all of these spending proposals. Questions could include:
- What is Warren's plan to implement the wealth tax? Why did other countries' attempts at this fail, and what does she plan to do differently?
- Would Bernie's Wall Street tax apply to retirement accounts? What impact would be felt by nonwealthy investors? (I'm currently paying my mortgage through gains I've made in the stock market, and I'm already paying taxes on any profits.)
- Many candidates claim to be giving back taxes to "middle class" families, but the income cut-off on eligibility is usually $50,000 for an individual, a salary that doesn't go very far in high cost-of-living areas and is lower than the average teacher's salary.
- Many of the proposals disproportionally affect parents rather than childless or elderly residents. How will this affect people more worried about their retirement than paying for education?
- Are any candidates advocating for paying down the deficit?
A tax is a tax is a tax, regardless of how it's dressed up. Someone will end up paying for it, and in most cases it won't be just the super wealthy. I agree the income gap needs to be addressed, but I'd like to see more transparency around these plans. And I don't see the same hard hitting journalism that is being directed at 20-, 30-year old decisions by Joe Biden being applied to the current plans being put out by more progressive candidates.
7
The unintended consequence of both plans is that higher education appears to be free and therefore no one questions if their education was worth the cost. Both Warren and Sanders are operating on the assumption that a college degree is worth it at any price. It’s not and it’s a good thing that we’re able to see it.
5
@Mark
Good points. Without the cost of something staring you in the face, it is hard to make good financial decisions. It was also easier in the old days before credit cards. You either had the money or you didn't.
Not everyone needs to go to a four year Ivy school, but if it is free, everyone will want to go. Not enough spaces will meaning rationing by other means.
Sanders doesn't understand pricing and the power of the market (he has a Soviet mentality) but Warren should know better (but it seems like she has forgotten).
2
@John Dal Pino
I think higher education should operate on a market-based system. College is already too expensive largely because of government-backed student loans. Further, I don’t think taxpayer money should be funneled into the pockets of tenured professors. If these institutions are worth it, then the students will pay them.
1
@Mark
You are exactly right. A segment of the population pays full price for college. A relatively small segment. And we would pay more if we had to because we can. Most college students at private universities pay far less because of government subsidies. Those people pay essentially the same even with a tuition rise, because they cannot pay more. So the government is the big white elephant that drives up costs via handouts- why would a college lower the tuition if the govt is going to pay regardless, and the private payers will pay regardless?
The same holds for healthcare.... there are no market forces because the government dominates.
1
Great article. Learned more than just listening to the candidates promises. Raising 3 grandson going to college, all of whom worked through high school and are now working through public colleges to avoid debt.
Wasn't in favor of the proposals from Warner or Sanders before and now I am convinced it will create more inequities than before. Students going to private and for profit colleges could have chosen to go to a public college of which there are many that are excellent. Oh, yes, I worked my way through college and graduate school too.
2
I am completely in favor of making public universities as close to free as possible for future students. My kids all went to SUNY instate and had many friends who did everything they could to cut down on the necessity for loans; part time and summer work, living at home or in very cheap apartments, taking IB/AP courses in high school, but they still had significant debt. I'm not against taxpayer help for such kids, but I know lots of other students and their parents chose expensive private or out of state schools over SUNY, and took out loans even though their family income was quite high. Maybe a better solution would be to just give a tax break to anyone who had to pay college tuition in the last ten years.
3
The general societal benefit should be considered. Individual grousing about outcomes relative to how hard they worked or how they starved thru college is just bragging that you were thrifty, or that your parents were actually smart and could afford to save.
Otherwise everyone should be jealous that rich people pay less % in taxes than most of the rest. And some, like our President and many corporations ( are people too, right?) like Amazon pay zero in taxes due to crafty rules and tax breaks. Not sure the Trump or Bezos kids will be sweating college costs.
Was I envious of CA residents who qualified for free state schools when I went to school vs the $875 per semester for ASU? Yes! But free state school ended in CA after Ronald Reagan left CA governorship....times have changed and the US is no longer a leader among nations with respect to education.
Such a free educational system should be progressive, like our tax system used to be. If you want to attend a private school, maybe you can do so with a voucher that would cover the state equivalent but that's it. SOunds like a great idea with issues to be worked out - what we pay our legislators for!
The general societal benefit should be considered. Individual grousing about outcomes relative to how hard they worked or how they starved thru college is just bragging that you were thrifty, or that your parents were actually smart and could afford to save.
Otherwise everyone should be jealous that rich people pay less % in taxes than most of the rest. And some, like our President and many corporations ( are people too, right?) like Amazon pay zero in taxes due to crafty rules and tax breaks. Not sure the Trump or Bezos kids will be sweating college costs.
Was I envious of CA residents who qualified for free state schools when I went to school vs the $875 per semester for ASU? Yes! But free state school ended in CA after Ronald Reagan left CA governorship....times have changed and the US is no longer a leader among nations with respect to education.
Such a free educational system should be progressive, like our tax system used to be. If you want to attend a private school, maybe you can do so with a voucher that would cover the state equivalent but that's it. Sounds like a great idea with issues to be worked out - what we pay our legislators for!
Instead of coming up with plans like this, they should be coming up with plans to get the yearly Federal deficit down from a trillion Dollars a year to around 200 billion a year.
4
@David Martin I agree. Let's roll back the Trump tax cut and the Bush tax cut.
Totally against sanders n warren plan.goto community college for 2 years, live at home and commute,goto state schools- in PA penn state satellite campuses are only 11k a year. In ny SUNY schools r about the same. Work while in school. Work FULL TIME during the summer. . Skip spring break. Kids are picking these schools often because of the beautiful campus and all extra stuff school offers. Need mandatory instruction in high school as to long term damage u are doing to yourself going to expensive schools. Biggest myth is college is not affordable. Be smart. Don’t major in sociology type degrees.
4
We plant trees now, not for us, but for our future.
No, life isn't always fair and many times the grasshoppers are bailed out while the ants do the hard due diligence.
But to advance our society and our future, sometimes we drag the deadweight, the deadbeat and the less fortunate forward with us. Next time it could be you or one of your own.
Sanders 'n Warren are on the right track to advance America.
Lets plant more trees.
3
As an individual I will not pay someone's college degree. I will give a tiny fraction of my income into a pool of money that will fund college. In return, students - future professionals on whom the economic outlook of this country depends - will not have to service massive student loan debt and consequently, their income (a fraction of the goods sold) will not have to account for loan repayment. The savings get passed on to the consumer.
Parents, currently pinching dollars in order to add them to college savings funds for future tuition, can take this money (out of the speculative Wall Street/investment bank pockets and put it to use toward themselves. Today. That money would work today! For them, not enrich some banker who's marketing arm has convinced them that they should keep up this charade because anything else would be "unfair".
1
Obviously this is a serious issue that will require a suite of solutions, but the Sanders plan comes off to me as a cynical ploy to attract millennial voters.
4
I'm going to opt out of paying the taxes on this one.... I took out my loans and paid them back. I don't feel like I have ANY responsibility for those who made the choice to take these loans out and are not willing/able to pay them back. In fact I am willing to pay the taxes this malarkey will require just as soon as the government pays me back for the loans I took and faithfully paid back. Lastly something given for free is far less respected than things that cost someone something.
2
I can’t give you the exact day and time, but I can tell you with considerable precision how the college loan and the national debt problems will finally be solved.
One day, minor functionaries at the Department of Education and the Federal Reserve Board in Washington D.C. will inadvertently spill pots of hot coffee over the large banks of computers they preside over, while they are simultaneously browsing the Victoria’s Secret and the Fox News websites.
Sparks fly, the lights go out and soon it is discovered that the college loan and national debt problems are no more.
There is a hurried conference at the White House between the President and leading congressional figures, and it is quickly decided to never speak about these matters again.
1
We should not forgive all student loan debt. HS students know the cost of the college they're enrolling in before they execute their student loan notes. Go to a public college or university. Pick a major that will lead to gainful employment. This is what my husband and I did. I took out over $100K in student loans for undergrad and grad school and I paid it back without parental assistance. Why can't others do the same? This is not a democrat vs republican issue. This is a "pay your debts" issue.
6
1. This is a give away to the educated middle & upper class at the expense of everyone who didn’t go to college. It’s ironic that such a regressive policy is coming from two of the most progressive candidates. Lest readers of the NYT forget, a minority of the US population goes to college and the reap a disproportionate share of wealth as a result.
2. This will do nothing to contain costs. Charging students $0 doesn’t mean providing their education costs $0. The issue is how do you stop state universities from building new facilities, expanding programs, etc and raising their expenses to capture more federal money?
4
“There’s no way to cancel this debt because it would be too damaging to society”
- people who support deductions for those with private planes, and letting teachers use their own money for their students’ school supplies
It may not make all problems disappear. But it sure would erase a huge part of my problem!
Both plans reek of political desperation.
1
Please tell me why I worked, every available hour possible, through college, if loans are going to be forgiven? Talk about a slap in the face!
4
One of the solutions to the problem of paying for education is to return to a progressive tax system when the states and federal government paid about 75% of the cost for each student. Instead of loans, students received grants which were funded by citizens (including them when they joined the work force). I attended the University of New Mexico from 1967-1971 and graduated with zero debt. From 1978-1984 I earned a master's and PhD from U of Colo. at Boulder and finished with about 5 thousand dollars of loans due. My undergraduate education was funded by a series of small grants plus the war orphan's act which paid tuition, books, and a monthly living stipend. For my graduate education, I was funded by graduated instructorships, NDEA grants, and summer jobs. This whole huge student loan debt has become a burden and a terrible scam and we must reform it.
3
I think that before anyone proposes addressing the debt, there needs to be a nationwide, comprehensive study about the factors affecting the costs of public and private educational institutions. I still don't have a clear answer to why the costs have risen so drastically over the years. I get that there are administrative costs, renovations, and salaries, but surely, the same costs existed in the 80s, when students could reasonably work to pay their own way. In addition, I think the rigor of undergraduate education, and increasingly graduate education, has been diluted by the need to have impressive graduation rates. So are you even getting what you pay for at some schools? The whole system of higher education in this country seems to be in a spiral, and it's hard to know where to even begin to repair things. It doesn't help that the private schools are so opaque about their practices. My grad school even kept their budget a secret from students. Until some fundamental questions are answered, I'm not going to get excited over any debt forgiveness rhetoric. The only practical proposal has been to allow graduates to refinance federal loans.
3
Warren and Sanders are just proposing to deflate one asset bubble (university educations) and inflating another. Think about it. This sudden mass infusion of significant wealth into the hands of tens of millions of people will be instantaneously transferred into stocks or real estate. If you think the price of housing is exorbitant now, wait until you start trying to bid against a bunch of millenials who suddenly received a six-figure check from Uncle Sam.
2
@Ed
On the flip side, millenials are increasingly unable to afford to purchase homes. So, when you want to retire and sell the expensive home you raised your kids in, you'll take a wash.
Student loans represent one more way in the U.S. (along with for-profit colleges, private prisons, pay-day and predatory lenders and military sub-contractors) where wealthy elites have conspired with legislators to rig the system and siphon money from taxpayers and working Americans into the off-shore bank accounts of the few. No one is saying that student debt relief will solve everything, but it’s an important start.
1
The Democrats are outright trying to buy votes. It is disgraceful. They are fine with bankrupting our nation for 4 years in power.
1
Student loans are a mass scam, very similar to George W. Bush's "ownership society" that led to mass foreclosures and the Great Recession.
Stop them now.
1
Seems like the comment section is dominated by people profiting off of predatory student loans. All schooling should be free in any civilized country. The for profit college system and system of students going into debt to get an education is criminal and has greatly devalued educational institutions who are eschew scholarship to focus on making bucks and the bottom line. School Admins should have to forgot there inflated salaries and the system should be set up to reward scholars instead of people who are the best at getting large grants. The whole system is corrupt and rotten to the core. Give the students relief, or at least let them forgot debt via bankruptcy again.
2
Yeah? But it sure will make the debt disappear!
1
How about considering the fact most “colleges” probably shouldn’t even exist. Most offer a sub-par education to a less than capable student body. Most of these places are a behaving like a for profit organization and treating their students as a cash cow.
1
Unintended consequences are a liberal specialty. They are alternately called "unintended" and "unforeseen," but they are really just facts of the "Don't confuse me with" variety. Every bad idea is vocally opposed by someone who knows that one thing leads to another, and yet the proponents pretend that serious objections were never voiced.
The solution to the student debt problem is the Universal Basic Income. Just give every college grad a larger UBI for a number of years. If that seems unfair to non-grads, then try explaining how paying off a just SOME grads' debts is any more fair.
1
How do the Warren or Sanders plans solve the core issue which is sky-rocketing tuition? Seems they only feed the beast.
4
Sanders just jumped the shark.Let's stick to Medicare for all
1
"Canceling Student Loan Debt Doesn’t Make Problems Disappear"
Since the NYT conveniently forgot to mention this, Bernie Sanders is also campaigning on tuition assistance for all, which WOULD fix the problem of student loan debt.
-Bernie Sanders 2020
4
College? What about K-12? Sanders' and Warren's band aid for college misses the bigger picture. State governments have been cutting funding for ALL education each year for decades so that "No more taxes" legislators would have a better shot at re-election. However, state colleges and universities, and elementary and high schools are all STATE funded entities. This article exposes a significant glitch in Sanders' and Warren's plans, but I have not seen any plan to stop state governments from abrogating their responsibilities as they have been doing for decades.
To the delusional boomers who don’t think that this is possible, I have three words for you: Wall Street Bailout. According to Forbes, it’s 14 trillion and counting. I will not shed a tear f creditors go out of business. They shouldn’t exist anyway.
3
You want free college, like Germany? Here's an article from the Washington Post that shows the hardships they have to suffer at German colleges.
No football!
https://www.washingtonpost.com/world/europe/bernie-sanders-and-other-democrats-are-embracing-free-college-europe-shows-theres-a-cost/2019/06/25/2939047c-8bc4-11e9-b6f4-033356502dce_story.html
2
If you want to forgive student loans, first go after the people that benefited from the easy money (oh, wait, you lowered their tax rates). Secondly, consider taxing endowment funds of the universities-. Third, get the government out of the loan business and force higher education to alter their cost structures. Get to the root cause of the problem first to keep it from happening again. Forgiving student loans is the left wing version of MAGA
3
Ehhhh-
Going massively into debt to attend one school when there is a more affordable option is not a decision which one should expect society to subsidize.
My kids had private college options and much less expensive public college options. That all opted for the latter. They are all doing fine. They have no undergrad debt.
There are millions of people in this country who did not have plausible options to go to college at all. To suggest that, in essence, they eat some part of the cost of student loan forgiveness is just unfair in the extreme.
Exactly how these ideas by Sanders and warren are not pandering and non-progressive is somewhat of a mystery.
7
@Lefthalfbach At least for now we can largely control our destiny in the US by the decisions we make as you point out. Hopefully it will last.
It galls me that I worked my tail off to put my kids through college debt free, and Warren/Bernie et al want my money to erase debt of college grads who borrowed. Why do they get a free ride - and I don't? To be fair, they should refund my four college tuitions too.
Free state college is an unfunded federal mandate, by the way.
6
Of course the bill does nothing for people who've already paid their loan debt. It's a debt relief bill. Is this supposed to be a coherent criticism of the idea?
4
How about a policy reigning in cost of private colleges and graduate schools? We’re getting gouged because they know that Uncle Sam will pay but we’ll be left with a n exorbitant debt after interest.
1
These plans should be dismissed out of hand and Obama’s plan should be continued. We need to end this absurd student loan program sooner rather than later and some private colleges will be forced to make some very difficult decisions. In the early 1990s some private colleges prided themselves on keeping tuition affordable so it can be done going forward. Get rid of student loans and private colleges will figure out a way to keep tuition affordable.
2
The author is right. The regulators would have to crack down on predatory behavior in the for-profit loan market. They'd have to go after the systemic crooks that created the student debt tragedy in the first place.
2
People borrow money for all kinds of reasons and then regret it: graduate school, taxi medallions, payday loans, credit cards, municipal budgets.
Maybe we should outlaw all debt? Mortgage forgiveness forever! Boycott your credit card payments! Maybe we should default on the National Debt to set an example.
1
How about instead of paying off the debts entirely the federal government could refinance all outstanding student loans at a low interest rate? I'd be able to pay off my loan much faster if it were accruing interest at 3% as opposed to 7%.
7
All we need to do is allow student loan debtors to file bankruptcy.
2
Why does tuition etc increase at 7% per year in the first place?! That’s what Sanders and Warren need to address.
4
Forgiving debt for past college loans means that we made college free (or partially so) for some people. But not others who paid off their loans, worked through school, or otherwise paid for it.
To be fair, if we are going to make past college expenses free for some people, then we need to make it free for all people.
That is a huge part of the problem with these ill-conceived plans from Mr. Sanders and Ms. Warren (whom I am otherwise largely in agreement with).
4
Sanders and Warren trying to out do each other with bigger, more absurd, more totally impossible to ever actual enact plans. Democratic primary politics at its worst.
Both of these plans ignore the primary reason that college costs have risen so much faster the the rate of inflation, cheap loans and other government aid. Offer even more government money and colleges will rise cost to match the money available. Bernie Sander doesn't have even the most basic understanding of economics, but Warren knows better or at least should.
4
In light of the confusion about the student loan issue, this was a refreshing article to read. Many people don't make the extremely important distinction between undergraduate and graduate school debt. Consider that the average student debt level for a graduate of a non-profit or public school is ~$30,000. Not chump change, for sure, but less than the average cost of a new car (~$35,000). Car loans are usually structured to be repaid within 5 years; student loans should be able to be paid within 5 years as well.
The problem is with debt from graduate schools, and there's blame to go around. For some reason, many grad students think that taking out a couple of hundred thousand dollars is reasonable. Instead of a car, we're talking the size fo a mortgage, which takes a long time to pay off. Furthermore, many universities are more than happy to admit students to graduate programs, knowing full well that said students will have literally no income boost from the graduate degree. Universities simply don't care: they rake in the cash today, and defaults are someone else's problems.
The main problem seems to be an oversupply of non-value add graduate degrees in the market. Universities should be penalized for high default rates related to their programs through a proportionate cut in federal aid. I don't want to bail out reckless borrowers, just like I don't want to bail out a reckless homeowner who bought a house that was too big.
6
@BrooklynBond Yes! Thank You! I have friends who paid for grad school with debt knowing that they would be pursuing low paying careers when they get out. That was a decision they made and I should not be paying for it. The data is available and it is one reason I have not gone back to grad school although I'm sure I'd enjoy it.
My husbands friend's parents paid $150k in private school tuition for him to get a masters in sports management. He is now a PE teacher...you do the math! But if his parents thought that was worth their money...fine. As long as I am not the one footing the bill.
1
When I think of the billions spent to help Wall Street. When I think of the billions spent on the tax cuts. When I think of the tax breaks corporate entities get. There is no reason not to do this. Even from an economic standpoint it promotes aggregate demand.
5
Boy, this thread reveals a lot about peoples' character.
I have three degrees, graduating in 85, 92, and 97. Much of the debt I took on for the 92 degree was to support both myself and my now-ex-husband. When we divorced, I took that with me. I paid and I paid and I paid. When I remarried, my beautiful, generous second husband helped me pay some more. I finally retired my student loan debt, a bit ahead of schedule, the year I turned 50. It was genuinely an albatross around my neck. The interest was a transfer of wealth from me to investors that probably don't contribute as much as I do to making the world a better place. The interest was money out of my kids' mouths and out of my retirement.
But guess what? I would gladly have a completely unnecessary double mastectomy to let people under the wheel of lending thieves have a break. It would be so incredibly beautiful to give such joy and freedom to so many.
And most importantly, let's be very, very clear. Erasing current student debt, and ridding higher education of usury will mark one necessary redistribution of wealth this country so very desperately needs.
Do it! Forgive all the debt! Or at minimum, make all interest rates zero, and let people pay their principal back on a sliding-fee scale based on a combination of income and the value of the contribution of their work to humankind. Teachers, social workers, health care workers, public servants, etc. give so much for so little. This is a way to pay them more.
7
1. We need to stop pushing the narrative that a college degree is necessary for everyone. There are respectable and well-paid jobs to be had without one, and having one is no guarantee of anything except debt (unless one’s parents are paying). No one benefits from this line of thinking except overpaid college administrators.
2. Anyone signing on the dotted line for tens or hundreds of thousands of dollars worth of debt needs to do their homework first. My husband and I had a staggering amount of student loans in our 20s that we were able to pay back quickly because we were able to get high-paying jobs after finishing our post-secondary education (by the way, this was post-2008). Were we not enrolled in a well-regarded program at a well-regarded school, neither of us would have considered taking on as much debt as we did. I am not inclined to be terribly sympathetic to someone taking on $100,000 of debt to attend some tiny for-profit school that places an infinitesimal percentage of its graduates into full-time jobs with decent pay. There is a wealth of information online—take it in before making a major life decision.
7
The solution, as it almost always is, is to get the federal government out of the student loan industry. Let private lenders decide what degrees are worth finding and at which interest rates. Once art and dance and ethnic study majors see the sky-high interest rates that the market would set for those who want to pursue those majors, many will instead either not go to college or switch to a major that is more economically useful. We would all be better off, as more useful degrees are granted relative to the economically useless degrees, helping our economy through increased innovation, and students would be better off by being pushed to pursue degrees that will leave them economically stable. Not everyone who wants to go to college should actually go to college. The spigot that allows this to happen needs to be shut off.
5
This sounds like a terrible plan. I don't want the private, predatory lenders dictating what students should study. Instead, we should be asking why universities are charging the same price for a music degree as they do for an engineering degree. If anything, the people who stand to make more after graduation should be able to take on a more expensive degree. For art studies and trades, there should be an apprenticeship component to these studies because the practice is just as important as the theory, if not more so. Hopefully, this would reduce costs and help these students focus on their craft. You could apply the same approach to professions like law, because law school is one of the biggest scams out there. Overall, I think our society and culture is enriched by the artists, and I think we would be worse off as a country if they were priced out of existence by Wall Street and loan sharks.
@Jmart you can learn art at a community college for a low cost.
The problem with the plan is it discounts personal responsibility and makes life a lottery. Essentially penalizing those who chose not to get a PhD in art history, for instance, because the calculated the cost benefit. Those who made poor financial decisions would now be rewarded. Nothing could more starkly distinguish liberal from conservative ideology than this.
5
Except this is a problem across many fields of study.
I graduated from UMKC School of Dentistry in 2015. When I began the program in 2011, the total projected debt associated with tuition alone was around $120,000 (sans living expenses). Professional degree programs are generally too involved (23-24 credit hours/semester for dental school, which is often 10+ hour days at school, then homework afterwards) to also work a side job that would make any appreciable impact on your schooling costs, so the cost of living is added to the debt burden already present from tuition costs. Let's estimate $20-25,000 additional per year in most cities, for a reasonable but not extravagant student existence. That's another $100,000 in debt over 4 years.
With my personal $40,000 in pre-existing loan debt before dental school, all of this did not seem unreasonable for a well-paying profession like dentistry, circa 2010. However, following dramatic state budget cuts and related tuition increases, the cost for tuition raised by over 50% DURING my enrollment (from 2011-15). A student in the midst of a professional degree program that decides, "This suddenly costs too much, I want out!" is left with still-exorbitant debt and no degree/licensure to show for it, and even less chance to repay as a result. So having already started the program, you eat the cost and finish. That results in $300,000+ in debt these days (and rising!). For a job generally paying in the $100-180,000 range, this is still an astronomical figure.
Something has to change.
8
@CRC: by the time someone is looking to enter graduate school, they should have made these calculation as you just did. Life is not a certainty and welfare for dentists is not the answer.
1
This person just said that the tuition costs skyrocketed while he was in school, increasing his debt substantially. How exactly does one calculate for that before they get to grad school?
@Jmart
This! The costs change yearly, as can interest rates - some may be locked in, but not all. With graduate/professional schooling, the cost is often beyond what is available through traditional Stafford loans, and borrowers instead MUST (unless otherwise financially able) rely on GRADPLUS and other loans that may have high, and potentially variable, interest rates. This is not something that can be completely planned for in many circumstances, with the current systems in place. At no point do I ask for forgiveness in my post, but I did hope to make the point that the current financial aid landscape has changed SO RAPIDLY that it was almost impossible to plan for based on conventional wisdom. As such, one would hope for change.
2
1. Have a list of accredited colleges that are credible and do not include for-profit universities.
2. Perhaps make community colleges free for all who want to attend.
3. But to maintain the quality of our colleges and universities, some selectivity needs to be in place for students to attend on scholarship for free.
Not everyone is ready for free college, and quite frankly some of the best university students I had in class were those who were adult learners, who were in college because they wanted to be there, were goal directed, appreciated the need to be prepared and motivated to succeed, and were mature enough (for the most part) to realize that college is for learning and learning can be fascinating and expand one's experiences and intellectual growth.
In other words, "free" college sounds good, but it will really take careful planning and strict criteria to protect both students and universities and to provide a quality education.
And, it can't be that some anti-academic, scamming business man or woman who becomes POTUS can scrap the whole free college program by executive order.
4
The graduate school debt people take on to earn a Master's in Teaching and public K-12 certification should be cancelled completely. At the moment, some of that is "forgiven" through existing programs, though many recent stories have exposed exactly how unforgiving these programs are when it comes time to use them. Meanwhile, schools are trying to hire and retain highly qualified teachers while seeing their budgets slashed. Teacher pay is not rising with the cost of living. Some cities are considering building affordable housing so that teachers can live close enough to the schools where they teach. Forcing people who are interested in and good at teaching to incur debt for the privilege of doing so under the current conditions is insulting and prevents many qualified teachers from ever considering the field.
5
Isn't a major issue the fact that income from the Federal takeover of student loans is a cross subsidy for Obamacare? The proposals are to forgive the debt held by the higher earning portion of the public and cut back on the healthcare subsidies available to the poorer people? Or are we ready to throw in the towel on Obamacare after just a few years?
2
The tax increases to sustain this type of proposal will impact the people it is supposed to help. So a free college ride, for example four years, would be met by a lifetime of increased income taxes to pay for it for others that follow. Just something to consider.
3
The problem is that not every college graduate will make money. This plan will allow, for example, an art major to go to a ridiculously expensive school for free. That art major will almost assuredly never make enough money to positively contribute later on through income taxes.
1
Why does this straw man argument keep showing up? How much of the debt is actually incurred by art majors and art grad students anyway? What about people who are told they need a masters in teaching in order to qualify for certain teaching jobs? What about someone who wants to study economics in order to make the world a better place, but finds out that they need a PhD in order to really advance in their career? What about someone who is passionate about health policy but can only find a few graduate programs that really focus on the topic? We're in dangerous territory when we start trying to dictate which pursuits are worthy of our support. It takes all kinds of people with diverse passions to create a robust society. The problem is not that young people want to pursue their passions and excel at them, the problem is that there's a predatory financial culture that makes it easy for them to fall into debt, no matter what they study. Perhaps, we've placed too much hype in the private universities and have not put enough investment in our public ones. If I could afford it, I would gladly pay for a student to study art, finance, engineering, anthropology, or whatever, because parts of my life have benefitted from all of these things. As long as they were dedicating themselves to their studies or their craft, I would consider it money well spent.
@Jmart
At the undergraduate level only, debt at graduation averages about $33,000. Is a student better off not having 33K in debt, or paying higher taxes the rest of her life, regardless of major? From a pure dollar calculation only.
I'm going to be 40 before my student loans are payed off. My Bachelor's degree saddled me with 30K in student loans and for the next few years the only jobs I could get were as a secretary making just a little above minimum wage. Getting my master's significantly improved my employment situation, but add a lot more debt. My husband and I now make a decent salary but still struggle because of childcare and student loan payments. These are real issues for millennials. I'll have less than 10 years to save before the cycle repeats itself with my children going to college. Hopefully I can help get them off to a good start but with the ever increasing tuition fees, this seems less and less likely.
1
@S. Hayes Your earning trajectory is standard for college educated folks. There are a lot of jobs that don't require a degree that pay a higher wage than an entry level post-college position. But those jobs are physically tough, offer a lower rate of raises & career advancement.
1
It's economics. The Universities have benefited from knowing that their students can get easy loans from the government. It's easy to increase tuition and go on building sprees.
The Federal Government as Creditor
As of July 8, 2016, the federal government owned approximately $1 trillion in outstanding consumer debt, per data compiled by the Federal Reserve Bank of St. Louis. That figure was up from less than $150 billion in January 2009, representing a nearly 600% increase over that time span. The main culprit is student loans, which the federal government effectively monopolized in 2010 when the Affordable Care Act was signed into law.
Prior to the Affordable Care Act, a majority of student loans originated with a private lender but were guaranteed by the government, meaning taxpayers foot the bill if student borrowers default. In 2010, the Congressional Budget Office (CBO) estimated 55% of loans fell into this category. Between 2011 and 2016, the share of privately originated student loans fell by nearly 90%.
4
It sure helps. I've been carrying my debt since 1996. I'm certain my community would love to have my tax dollars rather than me spending $250 monthly on interest.
It may not fix every problem, but it would sure help me with mine.
1
In my view, we should do away with public universities. It just doesn’t make sense to me that the public is sending money to a school that chooses who they admit.
There is a lot about this that concerns me. First, that the Democrats appear to be trying to outdo each other in their giveaways. It becomes increasingly difficult to believe that all of this is possible in reality, as attractive as it is. I say that as someone who has long admired the Scandinavian approach to a social safety net. I would like to see them prioritize health care, then once that is accomplished, move on to education.
Second, as the author states, wiping out debt isn't really a solution in the long term. Predatory for-profit colleges need to be dealt with. Predatory school loans need to be dealt with. Predatory credit card companies need to be dealt with. Accurate information needs to filter down to the students that are taking on crazy loans that they never should have had access to. The same goes for their parents, who should have known better.
Third, the situation in K-12 schools need to be dealt with too. Fixing the problem at the university level is ignoring all of the factors that sort out those headed for college and those headed to their local McDonalds.
To do any of this, the candidates need to win the conversation about what the point of government is and right now, the Democrats are NOT winning that conversation and they aren't going deep for fear of scaring off potential voters. So they stick with the headlines.
Cancel debt. Free school. Free health insurance. Free money. Good luck and godspeed. It sounds like a dream.
5
@Full Name: You wrote that "the Democrats appear to be trying to outdo each other in their giveaways." I could not help but recall that the Wall Street bailout has redistributed trillions of dollars in giveaways to bankers and other wealthy one-percenters, and the unending stream of tax giveaways for billionaires and super profitable corporations has given away more trillions to the people who need it least, including the most recent $1.5 trillion giveaway. That giveaway alone would have been sufficient to pay for Senator Sanders' and Senator Warren's student debt forgiveness bills. In other words, we had the money to pay for this, but we gave it away to the already wealthy and to corporations who refuse to pay their share for the benefits they accrue doing business in the United States. That money would have immediate benefits to local economies rather than being squirreled away in tax shelters and stock buy backs to benefit wealthy investors.
1
I second your point about providing accurate information to students. In hindsight, it is crazy to expect an 18 year old with no finance education to be able to make smart long-term investment decisions like this. Many entering grad school are not much better off, especially if they're going straight from undergrad to grad school. Financial literacy should be taught in high school so that students can make these calculations on their own, because that's what we're asking them to do. I remember taking my first finance class and thinking, "I wish I'd understood this stuff earlier." Better late than never, but I am frustrated at all the garbage fed to impressionable young people who have not properly been taught how money works. Some have parents who can educate them or talk straight with them, but most are easy targets for the loan industry. The best advice my mother gave me on this is that, if I dedicated myself, I could thrive at any university, so focus on the costs.
1
The debt forgiveness idea has many unintended consequences. The major one is it will teach people that borrowing money with no idea of how it will be paid back is risk free since if you complain enough, the taxpayers will pay for you. House payments are expensive. Are they next? Kids are expensive. How about them? Vacations, cars,... The list is endless. If I saved money for 20 years for two kids and paid with the savings and investment income, do I get my money back?
8
@John Dal Pino your behavior was very unequal compared to people who didn’t work so hard. Inequality is bad, as we are told.
@John Dal Pino: All of the other forms of debt you mentioned are dischargeable in bankruptcy. While I don't encourage people to declare bankruptcy we nonetheless acknowledge, as a society, that court supervised bankruptcy is important to maintain our rights. We cannot be thrown into debtors prison. Creditors cannot make our kids labor in workhouses. For all other types of debt, there are reasonable alternatives for people unduly burdened by debts. Not student loans. They cannot be discharged in bankruptcy or even in unemployment, poverty, or illness except under the highest standards of disability. Student loans are the ONLY consumer loans treated that way. This empowers predatory lenders because there is no risk to themselves and they can charge high interest rates because debtors have no recourse at all.
Frankly, while I support any form of student loan forgiveness, I would be happy with just treating student loans like all other consumer credit, allowing them to be discharged in bankruptcy if they become too burdensome. That's not a free lunch. A judge has to agree or to otherwise restructure the payments, and the risk of credit loss makes bankruptcy a non-trivial solution. I would be satisfied with that.
1
@Michael
Treating the student loans like other loans would be fine by me. But I am not yet convinced that the average student debt pushes you into bankruptcy straight away. My sense is that for most people, the need to use a lot of their disposable income to pay down the debt is something they just aren't mentally prepared for. No coffees, eating out, new car, etc. They also probably weren't thinking about the cost of school compared to what they might earn.
1
dont we all know that hen legislation is introduced, it is debated, concessions made, and then the end result is something watered down?
sanders is starting from "all debt" and if he were to become president that "all debt" would likely end up being "some debt".
warren is starting from "some debt" and if she were to become president "some debt" would likely end up being "even less debt".
dont get me wrong, i like both candidates, but when it comes to negotiating, id rather start with the full pie rather than a piece.
2
The proposals by Warren and Sanders to cancel student debts are desperate attempts to win an election by appealing to current and former college students who borrowed lots of money. My student debt wasn’t cancelled. I was in debt for 12 years. They should try explaining to current and former students who were responsible in their lending and made sacrifices why the debts of students who just partied for 4 years deserve a free pass. But, more importantly, they should explain to Americans who didn't go to college why they should subsidize the educations of those who did.
7
New America has so many of its own problems it is hard to see how they will gain relevance by posting OpEds attacking others.
That said, the Warren and Bernie plans are a boondoggle, a bandage, a feel-good, in-the-moment, rah-rah chant to draw attention instead of actually address the underlying problem.
A problem that government itself helped create, and I don't mean the dollar amount of the debt.
There is a circular firing squad of actors that cause the problem. Companies demanding certain "degrees" for jobs even at the entry level is a starting point on the circle. That demand arises not from actual performance needs but by standards set by the Government that say which jobs in which NAICS codes need what Skills and Education. That is driven in part by industry and education lobbyists. That standard then is used by Government to set "standard" job descriptions that Companies then use to hire workers. it is also used by accrediting agencies to drive what they approve at public, private and for profit schools. which then set prices based on cost to accredit those courses and hire staff. Which raises tuition which government then says, based on the company demands, will pay..
they are just shoot at each other and picking our pockets in the process.
Jobs need skills not degrees, particularly at the entry level. Focus on that and stop giving money for masters in underwater basket weaving and pretty beauty nail salon creation.
Back in the heyday of easy mortgages and rampant house flipping, prior to the crash, I taught at a state university on the East Coast that was close to the ocean. It was fairly common that parents would buy a house for the kid(s) to live in for four years and then sell it at a hefty profit. I often wondered how much these families received in federal college assistance.
I also taught at a private college in Missouri that was sued by the federal government for running a scam in which recruiters would go into inner cities and recruit underprepared minority students and helping them to file for grants, loans etc. The college would collect the first year’s tuition and fees, then, as planned, flunk the kids out. Rinse and repeat.
We need to quit thinking of college and the “college experience” as being somehow noble. That ship sailed about 30 years ago.
5
This is a complex issue, and while I think the status quo could be greatly improved upon to make the system more fair, the notion of canceling all outstanding debt is absurd. This just seems like a blatant ploy by Bernie to play to his base.
Excuse the meandering perspective here, but for what it's worth...
This is coming from someone who would have benefitted from this proposal. I graduated in 2009 with about $40,000 in student loans. I will finish paying them off this year.
They were an incredible burden on my life as I began a fledgling career (in financial services, ironically).
There is a lot of truth to this notion that current generations simply do not have the same standard of life available to them as the Boomers. I am doubtful as to whether I will ever own property or be able to support a family.
What is underlying this, I think, is just how expensive modern life has become. I want to enjoy my time on this planet. I do not want to pinch every penny and spend years being frugal and saving to maybe buy a house or support children someday.
I've already spent 10 years of my youth doing that
This is just one symptom of a much bigger and intertwined problem that is anything but straightforward.
What about the fact that 4 years of college is completely unnecessary in most cases? 2 years is sufficient for most fields. This could drastically reduce the cost. I spent thousands of dollars for electives I had no interest in, and had zero relevancy to my degree.
4
I’m strongly a Dem but don’t support this. We saved so our kids would not have to take out student loans. They attended state supported universities at a reasonable cost and got a solid education. Bailing folks out only will continue the hyper inflation of higher education for those who have the responsibility to pay for themselves. Folks should have thought about the value of those loans when they took them out and maybe should have gotten an HVAC certification, worked hard and made a decent living. This is a losing issue, particularly against Trump.
7
@Cliff you say you’re strongly a dem. That is doubtful, considering your views on private property and theirs. The Democratic Party is just as insane as the Republicans. Deep down, you know it.
“The Sanders and Warren plans control the cost of public undergraduate education by setting tuition to zero” ... Actually, this would control the PRICE, but wouldn’t do anything to address the true COST of the US higher education system, which is bloated with administration costs and fancy dorms and recreational facilities. On the contrary, if students no longer need to worry about the bill, The cost is bound to continue its upward trend.
5
Let's start by forgiving the college loans (not graduate school loans) of every person for whom Social Security payments constitute more than 30% of their monthly income.
These are the people whose quality of life--indeed their lives--may be put at risk by the need to repay college loans that they may not live long enough to repay. These loan payments have robbed them of their "social security" by often forcing them to sacrifice food or medical needs or familiar living conditions in order to meet their college debt obligations.
Let's pay for this loan forgiveness with a small, one-time surtax on the incomes of multimillionaires. If this works, we can move in the same way to help the next group whose needs for student-loan forgiveness are the greatest.
4
@SA
Why are people nearing social security age taking out loans to go to college?
1
@MidtownATL
They aren't. They took out these loans many years ago and have been paying on them right along. But the amounts in many cases were so large and the incomes or other economic circumstances of the borrowers were so problematic that they find themselves in debt even when old enough for Social Security payments.
@MidtownATL Its for their children or grandchildren. They die, the loan is cancelled.
Tuition and fees at most private dental schools is now around $90,000 per year, for four years (with the interest racking up starting on day 1). This does not include food/rent/living expenses. Most dentists make decent salaries, typically enough to disqualify them for any type of student loan tax benefit, and perhaps enough to be disqualified from Senator Warren’s relief proposal.
It seems there are simpler, more realistic things that should be considered that would be more equitable for all student debtors:
1. Allow (at least some amount) of loan payments to be made PRETAX
2. ALLOW US TO REFINANCE AT LOWER RATES.
3. Remove the income cap on the student loan interest deduction - use instead a person’s debt:income ratio. Yes, the dentist making $150,000 has a nice salary, but when he/she owes $600k at nearly 7% interest, are they better off than a teacher making $50,000 who owes $50k in student loans?
- Also increase the deduction (or ideally, do number 1 above).
2
@Austin, Consider the unintended the consequences. If the barrier to entry at dental schools was lowered, more students would attend dental school, thereby resulting in more dentists, which would drive down the demand for dentists and therefore the salaries of dentists. Dentists would then have even more difficulty paying back their loans.
Missing from this analysis of the Senators' proposals is mention of who holds the paper on these loans. I'd guess there will be a flood of legal challenges by the creditors.
1
@Chuck T. The government holds something like 90%. Hence, it is a giveaway from taxpaying families.
1
Get up from your desk. Go to the bathroom and look in the mirror. You are staring at one of the 325 million creditors for these loans. Since 2010, when President Obama banished the banks from student loan business (as a bank shareholder, thank you Mr. President!), the US Treasury finances just about every student loan.
1
@LarryLynch Paying for people to intellectually and professionally enrich themselves is not a 'mistake', it's a societal investment. It's ironic to hear bourgeoisie baby boomers screaming about free money after having received so much of it in the middle of the last century, when policymakers made it a priority to ensure that the cost of public higher education was practically free. After about 40 years of boomer inspired neoliberal orthodoxy, which has included endless tax cuts for the rich and substantially weakened state support for higher education, we are now at a point where 65% of all student debt is held by individuals in their 20s and 30s.
And I have news for you: there is a lot of "free money" from the government going around today, and most of it is not going to people or corporations who will use it for the betterment of society. Let's start financing our people again - student loan debt cancellation would be a great start.
6
Come on, Ms. Warren. Come on, Mr. Sanders. This is how you lose an election. Focus on the good progressive policies that will help most Americans.
As evidenced by the comments from my fellow progressives here, forgiving student loans is not one of those good policies.
---
As a progressive Democrat, I support:
1. Medicare for All
2. Education, including affordable public colleges
3. Infrastructure investment
I support equal opportunity for all Americans. I support the social safety net, to help people who've fallen on hard times to get back on their feet. I believe government should offer a hand up, rather than a handout. I support the rights of labor to organize unions. I am an FDR Democrat.
I don't support writing off student loans completely. I don't support the Universal Basic Income.
The Tories in the Trump Republican Party want to concentrate all the wealth and political power in the hands of the few. The antidote to that is not to stroke checks to Americans. Rather, it is to empower Americans to lift themselves up and help themselves.
9
@MidtownATL How is public college not affordable? State schools cost typically around 15k/year.
Kids who get financial aid, grants, and god forbid, a real part-time job, could easily pay 15k/yr. Nothing worthwhile in life is easy.
3
@MidtownATL
Warren’s student loan forgiveness plan is an indictment of a federal Medicare for All program. The printing press undermines all good intentions. The reality is M4A makes more sense at the state level and Bernie and Warren could start a program tomorrow using the state Medicaid office.
@Social
I agree with you. Public colleges are mostly affordable. I teach at one, with an in-state tuition of $10,000 per year.
There is increasing demand for college (and understandably so). There is a limited supply.
In the 19th Century, the Morrill Land Grant Act funded a dramatic increase in public universities. Perhaps we should do something like that again.
2
I am uncertain about canceling debts unless we can truly find the money to pay for it. I am in favor of increased support for public colleges - whether to the colleges or students - so they can regain the status they once had.
However I would not necessarily make them free (unless the student demonstrates finamcial need) - just a lot more affordable. Otherwise we can end up with a lot of students who only go to school by default of not wanting to do anything else, as I’ve seen in Australia in the 80s (This may no longer be true). There should be a certain investment of effort and dedication from students, so we don’t end up, in extremes cases, with the likes of Olivia Jade...
1
@ml Re: finding the money. We just gave billionaires and profitable corporations a $1.5 trillion tax cut, that would have paid for forgiving the entire $1.5 trillion in student loan debt. The Wall Street bailout has passed the $10 trillion mark. There is always money to help the wealthy get wealthier, but we just cannot "find the money" to help the 99%.
Pointing to professional and grad schools is a red herring. The debt taken on for undergrad is much higher, because its often borne by parents. The only fair solution is to use tax returns to refund college costs. If that can't work, lean on colleges to provide the data.
Then provide grants retroactively. Those same grants can then be applied into the future.
The gov't can regulate repayment terms, so that retroactive grantees can pay off loans. Tax returns are nice, because it allows gov't to use tax credits in some circumstances, and use a sliding scale.
But Upshot is part of the problem. They keep telling us that those with bachelors will earn an extra 1/2 million (give or take 1/4 million) over lifetime. Guess what. If that's the belief, then colleges will charge up to 1/2 million and people will still pay.
In fact, people who go to college are likely to earn 1/2 million more over their lifetime without stepping a foot on a campus. They have better family networks, better K-12 education, and maybe a little more smarts. These are much more important than a degree.
2
Why not just work on
- why education costs too much?
- why health care costs too much?
- why drug prices cost too much?
- why homes and rents cost too much?
Keep taking money from one to give another doesn't work.
Government is really good at paying, it is just not good at knowing WHAT it is paying for, or WHETHER it is worth it.
8
@MM. I already know the answer. Too much cheap money floating around and anyone who can fog a mirror getting a big loan. If you take the money out of the system or you drastically increase the barrier to access, then fewer people will be able to spend money they don't have, which then drives down prices. You may think this may result in inequality of educational opportunity, and this is somewhat correct. We just have to make sure that there are programs available for the neediest cases to help maintain the balance.
On it's face, this analysis seems flawed as it fails to account for the incentive both Warren and Sanders create for students to choose to attend public university rather than spend orders of magnitude more on private, for-profit colleges.
3
I would propose to eliminate the federal backing for student loans and to allow all of that debt to be discharged in bankruptcy. That will place natural limits on the lending and borrowing.
If we combine the above steps with expanding opportunities at public colleges and universities at public expense, the private colleges will have to become more efficient or to provide more financial aid to all but the wealthy to attend their institutions.
Maybe it’s time to show that we can go back to quality public colleges and universities and use that competition to drive down the cost of all education, public and private. For too long, the federal loan backing has just driven up the cost of education and kept it out of reasonable reach of students without becoming indentured servants of the student loan shark complex.
5
@Jazz Paw
Thank you. We did this once, in the 19th century with the land grant colleges. We should do it again.
We have a supply and demand problem. More people want to go to college (a good thing). There is a limited supply of admission slots.
The Morrill Land Grant act of the 19th century (which funded the land grant colleges, including most "state" universities that survive today), was in response for the need of a more educated workforce in response to the industrial revolution. Do American workers need more skills now? Sound familiar today? Let's do it.
@Jazz Paw
Let the private colleges be brazen about taking money from the wealthy. Apparently there are quite a few wealthy people than can afford $500k in a lump sum payment but not that many that can donate $5 million for a new building. $500k pays tuition for 10 other students for one year at USC...so as long as everything is above board let it happen.
The Federal Government owns all the student debt. It has been that way for 9 years. People keep thinking some cabal of banks, protected by bankruptcy laws, are sticking it to students. Wrong, wrong, wrong.
1
Public grade school is already free, private not so much. Having the same options for secondary education is not a bad thing. Paying extra for private / graduate school is also not a bad thing. Both can co-exist happily together.
In that regard, I feel like Warren's plan is more feasible, as it has a lower up front cost, and targets those that need it more, along with aligning current forgiveness with the expected future state of education.
1
@Tom
No it's not. I got a graduate degree from UC as a California resident in 1978 and it was cheap but it wasn't free. I had to take out a small student loan to afford it.
Tuition at UC schools is now $14,000 a year for residents & $48,000 for out of state students - who are still getting a bargain. My niece currently attends a state college in Virginia where tuition is $18,000 a year. That's hardly "free."
@Tom
Printing more money is not a “plan”. Anyone can solve problems by printing more money...at least in the short term.
Government programs that are popular, have staying power and change our society for the better--like Social Security and Medicare--have fairness built into them. Very few people complain that Social Security is unfair--because it isn't. Everybody knows the rules when they start working, and everybody benefits according to those rules when they're ready to retire.
This proposal, in contrast, reeks of unfairness because it retroactively changes the rules of the game. Millions of students chose to go to public universities for financial reasons even though they were admitted to more plush or prestigious private universities, others didn't go to college or graduate school at all because they felt they couldn't afford to. This proposal will make their financially cautious decisions look foolish, and disproportionately reward those who chose extravagance over prudence.
I'm all for spending money to ease access to higher education and thereby create a more educated and egalitarian society. But do it by changing the rules that affect current and future students, so that young people and their families can make sensible financial decisions.
8
I'd be in favor if: 1. Students would be taxed on the debt-forgiveness income; 2. Future student loans are curtailed significantly so that colleges would be forced to become more efficient and charge less and;3. loans would be granted only where the students could demonstrate that their choice of major and college gave them a reasonable expectation of repayment. It's far too easy to get a student loan today. As a result, the colleges enjoy an open spigot of tuition payments such that they have no incentives to cut out waste. These dynamics were also in play leading up to the real estate-driven financial crisis of 2008. 'Anyone remember NINJA loans?
2
@pete I'd go further. Only STEM degrees are covered. And all recipients of debt forgiveness must have served in the military for a certain period of time or must work for the federal government for a certain period of time. While I can see this issue from both sides, I must admit that I have a visceral reaction to the basic notion of people receiving bailouts for financial obligations they took on knowingly. The dems yet again are showing themselves to the be the party of no personal responsibility.
1
We are told that only STEM graduates will be competitive in the future. This means STEM grads will earn enough to pay back their loans.
We need to support students who study important things like arts and humanities which are necessary to society but which an economy such as the one we’ve chosen doesn’t support.
Of course, if you believe that 4,500 years of human civilization is irrelevant to today’s world, then go ahead, forget about it and go for the bucks.
Just don’t ask me to pay for some geek’s job training.
@Ed Agreed, I thought of that later: Some sort of government/public service work would be required. This would be analogous to armed service academy grads' obligation to serve in the military for a period of time as consideration for the excellent free education they receive.
Well at least we are talking about it now! I want to cancel student debt and I worked hard to pay off my own part. But this is another way the rich hold workers against workers! Look what he has, not look how it might benefit us kind of attitude. If you sell tax cuts for the rich as trickling down won't this have a bubble up effect?
4
College education is wonderful. Most people do not need it. We all know many people with college degrees who, for whatever reason, do not work. College was a bad investment for them. We all know people with college degrees who have jobs that do not require college. College was a bad investment for them. Forgiving debt, and making college free, cheapens the experience in more ways than one, and perpetuates the myth that one needs a college degree to sell insurance, or manage retail/wholesale businesses.
Anyone that wants to go to college should. But they should pay for it.
The best way to bring costs down is to get rid of the big white elephant- the government, that funds an enormous amount of private college tuition for a large percent of the population, providing a disincentive to universities to control tuition costs. Just like healthcare.
10
Although I like some of Warren's and Sanders' policies, I am not a fan of outright forgiveness of student loans. Many other comments have expressed good reasons why this is not a good policy.
Here are some of my thoughts on college affordability -- mostly looking toward the future.
1. Go to a state school. Many are excellent. (Go to community college for the first two years and then transfer if that helps.)
2. As a nation, we should expand the number and capacity of public colleges. Consider a updated bill modeled on the Land Grant colleges in the 19th century. This will address the increased demand and constrained supply of university admission slots, and help contain tuition inflation.
3. Remove the bankruptcy exemption for student loans. Bankruptcy is a last resort that hurts both the borrower and the lender. But there is no reason student loans should be considered different than other loans. This change would help address the moral hazard issue.
4. Students should consider work-study jobs during the school year, and paid jobs/internships over the summer. It seems like this used to be more common even a generation ago.
5. Don't take out loans for degrees that will not lead to jobs that can justify the cost of your education.
6. Finally, I could support partial forgiveness of existing loans through programs where borrows pay X% of their income for Y years and the loan is considered settled. Some programs like this already exist.
3
Let me tell you about 3 student borrows I know.
One guy's parents paid for his college, but he took out loans anyway. Interest on federal loans doesn't start to accrue until graduation, so he took the max out each year and put it into a certificate of deposit with a guaranteed return. When he graduated, he paid off the principle and used the interest to take a surf trip.
Another guy was a PhD student who was funded, but used a student loan to speculate in the real estate market. He took out a loan and used it as the downpayment for a 5/1 ARM. It was a gamble, but it worked, he made good money.
The third guy was me, I paid off my $24,000 student loans (for a MS in engineering from a public college). This was meaningful debt in the late 90s, but it wasn't terribly difficult to pay it back. I got a good job, I paid twice the minimum every month, and it took me a few years, but no real burden.
None of us should have had our student loans paid off by the taxpayer.
Believe me, I have sympathy for some of these student debtors. The student loan system can be a predatory trap for very naive young borrowers. Yes, they're foolish but they are often 18, signing the first legally binding contract of their lives. Let's look for a reasonable way to help them (that does not include a total free pass on their decisions).
Sanders and Warren: I'm glad you are focusing on this, but try again. It is deeply wrong to ask the taxpayer to cover the debts of the first three scenarios.
15
Forgiving college debt for everyone just makes sense. Means testing is a liberal elite favorite thing, along with welfare reform and all other conservative behaviorist social policy dressed up in the language of concern. But it's true that the children of the upper middle class would benefit most from this program. So we need serious other policies in place that boosts the lower classes even more.
All of this is very, very unlikely to ever see the light of day without a movement pushing for it. That's why I'm voting for Sanders. He's the only candidate who recognizes the need for a strong popular movement if this kind of progress is going to happen. Obama could have done it after he was elected, but he told his movement to go home. Sanders won't.
3
Here's my issue: Right now public school A charges $15000 while prestige school B charges $40000. If the public school will have its tuition fully covered by the Feds, then why wouldn't it raise its fees to $40K like the prestige school, or even higher? It's still "free" for the student regardless. Or, if there's a cap, say $20000, then all public schools will charge exactly that cap, no more, no less. There will be no competing on price, which means no inventive to maximize value. The schools will charge the federal government whatever they can get away with, the same way unscrupulous doctors make frivolous charges to private insurance.
And just as our insurance goes up to cover the costs of those unnecessary procedures, our taxes will spiral up to cover public schools overcharging the govt.
4
@xigxag
Of course! For those who seemingly can't understand what throwing money at higher ed has done, let's look at an easier example: say the Feds handed out money to anyone who wanted to buy a car. Would anyone want just a basic car, reliable transportation? No, they would want one tricked out to the maximum funding available. Would anyone bargain with the dealer or just pay the sticker price? Would the dealer offer a basic model? Of course not. They would bundle extras and sell tricked out models. Would they negotiate? Of course not. They would know as well as the customer how much money was there to be spent. Every year, cars would get more expensive and there would be caterwauling to increase the amount of Federal money to cover the higher cost. And higher and higher and higher and higher the prices would go.
5
My understanding of the student debt mechanism is that debt is initially owned by various banks, who don't portfolio those individual loans, but bundle them up and sell them to wall street investors as a portion of various mixed offerings. Schools would not be financially affected by loan forgiveness, nor would banks, nor would taxpayers. The effect would be on investors and speculators, who would just invest in something else if their investment in a particular fund was losing money. The sky is not falling.
To a different point, some have expressed the belief that students who take out student loans are somehow irresponsible and wrong. Many are investing in themselves and their future. They contribute to the economy and society and make the required payments. They just didn't have the luxury of being trust fund kids who didn't have to take out loans. Loan forgiveness would level the playing field by removing a considerable burden by allowing them to move up the economic scale. The American dream, as I recall.
1
The only “investors” involved are the ones buying standard US Government bonds. Private banks have had nothing to do with student debt since 2010. Your model is for pre-ACÁ.
Even interest-free educational loans would make a world of difference for non-affluent students. My loans averaged an interest charge of 6%. Another student who borrowed the same approximately $40K that I borrowed, but on zero-interest terms, would have had a repayment burden that was $20K less and over a 15-year repayment period, would have made payments of >$100/month less.
4
My husband and I have one child. We have only one child because with the current cost of living we can not afford to properly care for more children. I was given the gift of a fully funded college education. My parents made serious sacrifices to make that happen. My husband’s parents had fewer financial resources. He attended college with the help of financial aid and a work study program. He paid off his modest debt quickly due to a tight budget. When our daughter was born we immediately began saving for her college education. We are on target to be able to provide her with a fully funded undergraduate degree. How? We live in a tiny old house, we drive inexpensive cars, avoid restaurants, adhere to a small travel/entertainment budget, and avoid consumer debt. In the meantime, my friends and coworkers are forever complaining about their old student loan debts that they can’t get paid off. In the meantime, they drive luxury vehicles, take multiple expensive vacations per year, remodel their kitchens, and eat in restaurants daily. Their plan for how to fund their child’s college education? The plan I hear from them is to “apply for financial aid “. I’m going to keep living modestly and make the sacrifices I have to make to educate my own child. That includes driving my old car, carrying a lunchbox, and pitching a tent in a national park when I need a vacation. Student loan forgiveness and financial aid programs should be reserved ONLY or those who truly need it.
11
So well said and done.
To forgive the student debt ignores why tuition is so high in the first place. For example, it was recently found California State University was hiding $1.5 Billion surplus while raising tuition.
Th first thing that should be addressed is spending at public universities. Currently there is little accountability and a fraction of the dollars spent on tuition go to instructional spending or the money for fees for programs or facilities explicitly for the students. Excessive money is spent on Football, football stadiums, bloated administrations and vanity projects and buildings. Universities lack proper accountability and oversight. Regulate any university whose students receive federal loans. There are other answers.
University isn't for everyone. Vocational education is also important to invest in. Perhaps free 2 year community college should be the first step.
2
Better to spend 1.6 trillion helping the poor, the homeless, the orphaned, and the sick.
10
@Mark Davis
Decent healthcare. it matters to everyone, including those who are burdened by unpaid loans.
I’m concerned about making anything “free”. That devalues it. Yes, subsidize to the point where the cost is very reasonable, but don’t just give it away. Many students will cease to take higher education seriously and not stick with it.
2
I always love the "analysis" and critisim of plans to help average Americans and how this or that is not workable or has "unintended consequences. So dont do it.
I have yet to see this self inflicted gun shot wound analysis when it comes to 1.5 trillion dollar give away to corporations and billionaires.
Also NEVER is there a question as to how this is going to be paid for.
And mark my words when the Times runs stories going forward about budget problems there will NEVER a call to just repeal those cuts. It is always "cut spending, cut entitlements.
3
Students should pay back the first $25,000-50,000of debt, at least. If they bear no responsibility about their debt they will run up as much as possible, knowing it’s a giveaway.
If they truly cannot pay it back let them work in some public service in an underserved community for a couple of years.
If they get this as a complete handout, all they learn is to abdicate responsibility. Lots of parents and students work very hard to avoid running up debt, and equally hard to pay off their debt. In other words, they act like responsible adults. Isn’t THAT a lesson for students to learn?
3
@Franco51, I actually served in AmeriCorps VISTA, but my term doesn't count for Public Service Loan Forgiveness... I wish it would count...
In response to all those who wrote in about the sacrifices they made to save for their children’s education or to repay their own loans, I want to point out that the system is rigged against you. If you have nothing, you or you offspring will qualify for not just loans but free money such as grants and make work student jobs. We figured this out early on so never saved a dime for college for our three children. They each received many thousands of dollars a year in grants and work study while we took out parent loans (which we repaid) to cover the rest. If we had saved in advance they would not have qualified for these gifts.
2
@Regina in Civitatem
You just described my situation exactly! My husband and I are making huge sacrifices to save for our one child’s college education. Because of our modest lifestyle and commitment to save we will not qualify for any taxpayer funded assistance when our daughter goes to college. Most of my friends are taking your approach. They are not saving for their child’s education, even though they could afford to do so. Instead they drive expensive cars, take expensive vacations, etc. Their plan is to just let “someone else “ pay for it. But, I just can’t live my life that way. It’s my responsibility to do everything I can to provide for my child’s future. I hope to model that same approach to my daughter.
1
There is a middle ground: transform all student debt to income-based debt. If you can and want to continue to pay your existing loans, fine. Otherwise you get a one-time chance to convert to an income-based loan that would require you pay 10% (or whatever) of your future income for 10 years and then you are done. That would softwn the blow to the economy considerably whole still providing releif to poor and working people who have a mountain of student debt.
111
The biggest correlation with high wealth in middle age is high wealth in youth. The earlier people accumulate wealth, the more likely they will be wealthy. High student debt decreases the odds for affluence later in life. That is the reality that the proposal for eliminating debt and tuition free education is about. It’s the smart solution.
Unfortunately, the conservatives have most people all thinking like 18th century ruralists with religious beliefs that link success with virtue and hard luck with vice.
13
@J c There is already an income based repayment option, with debt cancellation at the end. There is also a public service loan forgiveness program. That being said, a physician employed by Cook County Hospital can still earn $300k/yr and qualify for debt forgiveness (based on public service).
7
@J c I like your idea better than the current income-based repayment plan, which, depending on the exact plan you choose, offers forgiveness after 20 or 25 years -- but then counts the forgiven amount as taxable income.
8
If you want to sell tuition free higher education, cancelling debt on student loans is a prerequisite.
However, What is missing from this issue is any preparation to sell the proposal.
There is a presumption that the justification is self evident. Sanders finished his education during the post WWII boom when public support for higher education was not controversial. But the success of the conservatives of denigrating public support for higher education was very successful. The public hates paying for people’s college and university educations like it’s highway robbery.
That notion has to be undone to convince people to fund it so that it costs students very little.
2
What about people like me who took losses in other avenues (such as time, missed employment opportunities, or quality of life) to AVOID student loans, or others who missed out on college as a whole because they wanted to avoid the financial problems that being a poor college student in the 2010s implies, or who took severe cuts to their quality of life so that they could be debt-free?
THOSE are the people that worked hard and should be rewarded. The system doesn't function properly, certainly, and there are those that get caught in debt that shouldn't be, definitely. But you can't ignore people who worked within the system and suffered for it in favor of only the people that show the most aggressive or obvious symptoms. That's like amputating an arm but failing to clean the stump.
4
Democrats keep finding new and ingenious ways to lose elections!
"Most loans are used for private colleges, for-profit colleges and, most of all, graduate school."
I love Bernie, but this is a really bad idea. I think he's just trying to find ways to get those young voters enthused about him again while he slumps in the polls.
5
please do dont pay university of phoenix and other for profit diploma mills back.
2
no loan forgiveness but definitely interest rates should be capped at 3 percent. also the student loan forgiveness program should be expanded for teachers and rural health care professionals. if Dems continue to push free college and student loan forgiveness they will lose the 2020 election. tax and spend liberalism is still a noose around the party's neck. they are fools to make it so easy for Trump to tighten it on them.
4
Do I get a bonus for not having children or student debt? Can this towards my healthcare?
5
@Barbara Van Erp
Or can the grads/parents who worked to avoid student debt, and responsibly paid off what they did owe, expect a refund?
All this does is encourage irresponsibility and the running up of as much debt as possible. Great lessons for our kids.
1
The next big Democratic proposal from one of the twenty-something candidates:
“Mortgage Forgiveness”
After all, how is one expected to enjoy the fruits of their labor when they are burdened with enormous housing payments for 30 years?
7
It also will not make the ignorant informed, turn the semi-literate into Longfellow nor widen a perspective about as narrow as a sparrow's beak. It will however pit one cohort against another, as all "liberal" concoctions do -- witness the current NYC public school disgrace. Nothing will empty these classrooms of qualified teachers and caring parents quicker than the social "justice" mobs. They deserve the educational, financial and technological deserts that is their futures.
2
would rather see tax payer money going toward helping folks get ahead than giving it to expand US hegemony throughout the world. Less military bases less weapons of mass destruction more helping folks get a good job st the trade level as well as higher education.
2
Typical oratory clickbait from Democrats, and I am a Democrat. Just like in the last meltdown why is the taxpayer inheriting the entire mess? I say share the pain, college loan originators and servicers who have and will make a boatload from dubious loans should have to settle for 70 cents on the dollar. Students should settle for the same amount nobody wins and everyone loses, just a little. I don't see how letting students completely off the hook or lenders discourage repeat offenses.
2
There has to be an affordable option for public college and trade schools. We should also copy the model Switzerland has and track students into professions early. For them being trained to be a locksmith vs a local banker is not such a difference since everyone makes a living wage and they have job protections and retirement security.
Taking the prudent parents tax dollars after they have sacrificed to educate their own kids to train other people’s kids in fashion merchandising or dancing is not the way to go.
I do think the government needs to take a more paternal approach and not let kids with uneducated parents and lack of guidance go “follow their dream” in college and get themselves enslaved with a lifetime burden of debt.
Seems like most who commented did not read the article and see that most debt is for graduate school. Please do an article explaining how the interest charges begin at the time one begins the loan—not after graduation—and why the interest rates are now exorbitant compared to other borrowing. Those readers who have past experience with their own or their children’s loans might not know how the current system is structured.
3
In the late-70s, I worked my way through college and took out a $2500 loan for three of the four years. Paid back every penny with interest on time.
I suffered for it and now want retroactive loan forgiveness. Let’s call it educational reparations so Dems will get on board.
What say you, Bernie?
5
There’s less loan debt from public universities, yes... but remember that’s because the taxpayers already funded those schools.
However, there are many for-profit schools whose practices are predatory, and I don’t think the government should fund these “schools,” and certainly not unaccredited schools. In funding insurance, both the government and insurers asses what the benefit should cost, and that is all they will pay. I think education funding should be similar.
75
@Marshall "There’s less loan debt from public universities, yes... but remember that’s because the taxpayers already funded those schools."
Actually, that's a core part of the problem: taxpayers *aren't* funding public universities nowadays. States have cut back university funding levels by 90% or more in many (if not most) places, resulting in huge tuition increases even for in-state students. The national average at public universities is approaching $10,000/year for tuition alone -- and for out-of-state students it's almost $25,000/year. Many are even pricier than private universities (which average around $30K annually): the Univ. of Virginia tops the list at $48,000/year.
I agree that government-issued student loans shouldn't be used for tuition at for-profit colleges, but they're only a small part of a much broader problem: higher education even for in-state residents at public universities is becoming an increasingly unaffordable option for today's high schoolers.
16
@Marshall
As Jeff has mentioned, states are not funding much. In some state university systems they barely reach a 10% nowadays. Another issue is how to make education less costly without losing quality. Universities are also cutting salaries for instructors, all this money is going to other things, and some are not necessary.
4
@Jeff
The states are paying more per capita to support public education than they were 40 years ago. The problem is the administrative costs at public colleges is ten times what it was 40 years ago, so the state taxpayer funds are covering only 10% rather than the 80% they were covering 40 years ago.
There may be some hyperbole in my analysis because it's been a few years since I last took pencil to paper. Regardless of the precision of my numbers, directionally, there would be no student loan crisis today if the cost of a higher education cost today the same as it did, on an inflation adjusted basis, 40 years ago. And there is no economic justification except that increasing federal and state funds lead to increasing costs.
In any private sector activity, costs per unit of value have declined over time. A ream of paper, a roll of toilet paper, a corrugated box cost 25% of what they cost 40 years ago and are of better quality.
In 1970, you could buy a minimum standard auto, new, for $2000 [the equivalent of $13,000 today]. It had a manual transmission, no A/C. Today, you can buy a new car for $13,000 that has seat belts, airbags, anti skid brakes, better fuel economy that doesn't pollute and will be road worthy for at least ten years.
In 1970 you could buy a mainframe computer with 64k capacity for $1 million or an HP handheld calculator for $800. Today, a 64k calculator costs about $1.
1
Canceling student debt is NOT a reward but an acknowledgement that the vast majority of students, even those with little or modest debt, have been hoodwinked by a system that favors lenders over borrows, which is a microcosm of our political as a whole. We elect our representative and yet they work on behalf of corporate interests, including, at times, the very colleges and universities we're told to rely on to climb the proverbial economic ladder.
We scoff and scowl when we hear democratic socialism, but here's the truth: socialism exists in the United States, though chiefly for corporations. Capitalism demands that institutions be allowed to rise and fall, but not here in the US, where failing companies are often propped up with one form assistance -- even cash infusions -- or another. However, when it's We The People who are struggling to get by because health care costs have ballooned and college debt continues to grow commensurate to college tuition, we're told it's our fault, we didn't try hard enough, we didn't adhere to the cultural myth: "pull yourselves up by the bootstraps."
We want, need, and deserve help, lest we continue with this system where every dollar the working-, middle-, and soon enough upper-middle-class earns ends up going to one business or another. If there's anyone we need to stand up against, it's our own politicians, both dems and repubs, and their "real" bosses, corporate interests.
3
All high schools should require sophomore level students and their parents to complete a course discussing alternatives to expensive college and university expenses, how to use the system to avoid going into debt and the consequences of having a student loan.
2
What about the parents who scrimped and saved so their children could come out of college debt free? What about the kids who worked all kinds of jobs in college so they wouldn't be burdened by debt when they graduated? I don't think it's good to give people a free ride all of a sudden.
9
This is too extreme and therefore causing a divide amongst Progressives. Why are student loans a new and unusual problem? Because the Great Recession caused it with its lack of jobs, high loan interest (thanks to Bush), and increased tuitions (loss of state/federal funding due to the Great Recession, higher demand, etc.). So therefore, we should only focus on the generation that was given an unfair condition. For instance, people who graduated with debt in the 90's didn't face such conditions, rather, they had similar conditions to the generations before them. Also, people that are graduating now do not face Great Recession conditions (unemployment is currently very low). However, high interest rates and tuitions do need to be resolved for today's students. The Great Recession is the fault of the previous generations (the adults in charge), not the college students. Therefore, the adults should help mitigate the problem, however, not eliminate it (that's too extreme). We should try bring student debt to pre-2005 normalcy for the students who graduated during the Great Recession. This will be a combination of lower interest rates, better repayment programs, and partial forgiveness. We should call it: Normalcy Adjustment to the Great Recession Student Debt. Background: proud progressive Democrat that accrued $50k in student debt to become an engineer. I'm a living example (along with my colleagues) that the university system can work properly.
1
In the latter 1950s and early 1960s, I didn't have to borrow to attend public college/university. I'm not sure what changed so that students now have to borrow to finance their education. I think part of the answer is that funding for public higher education was curtailed.
From talking to college graduates with student debt, I learn that their life choices are severely limited because of their outstanding debt.
I think we need to address the underlying problems that caused the necessity of borrowing to obtain a higher education.
3
I think there should be a very cheap public school option and a cap on predatory interest rates but canceling the debt will have unintended consequences. Imagine the doctor or lawyer who spent her 30’s with debt having to compete to buy into a practice with someone in their late 20’s with none.
Forgiveness after x number of years is a disincentive to make money. I have a friend with 2 Ivy degrees who can’t work on the books or get married because she will lose her deferment if they see spousal income and she believes the debt will eventually be forgiven.
1
To all the folks complaining that they scrimped and saved and managed to pay off their student debt back in the day, so it's unfair to let today's students and debtors off the hook, please consider the broader economic impact of student loan forgiveness. First, loan relief will provide an instant $1.5 trillion economic boost, benefiting everyone. That money would immediately enter local economies as rent, groceries, child care, retail sales, home buying, charitable giving, and all the other ways that local economies benefit from commerce.
Second, the Trump administration's tax cuts for billionaires gave the wealthiest Americans and the most profitable corporations $1.5 trillion. We already had the money to forgive student loans but we gave it away to billionaires to squirrel away in offshore tax havens and to profitable corporations for stock buy backs. We gave it away to the people who need it least, on the backs of college students and working graduates. THAT is where the unfairness occurs.
4
I don't get it. Can anyone help me?
If people can borrow from either government or private institutions and default on it without consequences why would anyone not default on any debt? Today student, then auto? then credit card? then mortgage? When does it stop? Why would any lender want to loan to them?
5
They can’t. There are profound consequences. In 2005, all qualified education loans were excepted from discharge in bankruptcy with the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act. This was the culmination of legislation signed mostly by Republican Presidents spanning back to Reagan, making it almost impossible to get bankruptcy relief for student loans. Over the years both Hillary Clinton and Obama sponsored legislation to reverse this but Republicans defeated them in Congress.
I am puzzled by the current situation.
When I went to college in the 60's (a very expensive private school) my parents, who were not wealthy, paid all but a very small sum. I had minimal debt. This was largely because tuition charges were reasonable. I received an excellent education.
Now my Alma Mater charges many times the tuition my parents paid. You would have to be a billionaire to pay it out of pocket. Meanwhile that very same Alma Mater is sitting on a massive "endowment" as are many comparable schools. Whyever are charges so high now?
8
This seems so focused on the middle class and above. Couldn't Poll grants be improved for those with less income? We worked hard to pay for our daughter’s college and PhD program. We do not live in a big house or take fancy vacations.
I can see free community colleges and training programs and I can see lower income college loans. I am unclear how debt forgiveness would work.
Still, I am in favor of Elizabeth Warren as a nominee. Her plan makes more sense than Sanders’ does to me. Does he really want me to pay off debts for rich kids and doctors?
4
I graduated from college ( a state school) in 1978. I got some help from my parents, and a small scholarship, but I still had to take out loans and spend 15 to 20 hours a week at my work-study job. When I decided to go into teaching, I took out more loans to pay for my Masters degree; I also worked part-time at a supermarket and substitute teaching. It was hard paying off those loans on a beginning teacher’s salary - it took me 10 years. Nowadays, however, I couldn’t imagine being able to go to school that way. Even at my state school, tuition is prohibitive for many of my neighbors. I know a lot of bright, promising, hard-working kids who are postponing or even giving up their dream of a career because their families simply can’t afford college. “Poor planning” has nothing to do with it: college is just much more expensive, and middle class incomes don’t go nearly as far as they used to.
What we need to decide is this: do we want to live in a country where only rich families can afford to send their kids to college? If not, we need to do things differently.
5
I believe that when you get something for nothing that is what it is worth to you, students do need "skin" in the game.
What I really wonder though is why interest on a home or car loan is so much less than a school loan. Also college is about education not having fancy dining experiences and health club like gyms on campus to pay for.
1
Interest on loans to engineering, science, math or technology students should probably be far less as they approach graduation Interest rates for medical and dental students should be very low. These students rarely default on loans. But they are charged far more to offset the much higher rate of default in many other majors. A doctor or graduate engineer will probably find employment. They worked hard to achieve their degrees The risk of default is minimal. Someone who majors in philosophy or art appreciation will have a more difficult time finding employment that utilizes their expensive education and pays well. It’s not to say their education choice has no value. Rather it is not in demand. They are more likely to default. I am certain that some people believe that it would be nice if hard working savers who want to buy a car or house would subsidize the interest rates of those who have never saved a dime and can’t hold a job longer than a month.
2
When we think of the greatness of previous civilizations, for example 5th Century Athens, or Renaissance England, it is not the engineers or doctors we immediately think of, it is the artists.
The arts provide us with a place on the continuum of human identity, without which, a robust economy is meaningless. People end up knowing the price of everything and the value of nothing.
As far as philosophy is concerned, “The unexamined life is not worth living”.
At this point in American culture we should be encouraging artists and philosophers and poets and providing the gifted few in those fields with the resources they need to thrive.
Eventually, most tech jobs will be taken over by AI anyway.
1
I lived frugally all my life so it should be ok for me to pull the ladder up on the future generations. I have my own pains and so tough that I want the dentist to pull harder to break my teeth. Why can't the younger ones be tough like me? I want to let the younger ones know that I still have 31 teeth left to be pulled out before I leave this earth. Why do they have less than 32 teeth by the time they enter colleges? I think I better stop before I lost my humanity.
3
I think Sanders proposal, and to a lesser extent, Warren's proposal, are political pandering that don't hold up to a rational review. The fact is that some students take loans and many don't. I limited my standard of living so that my son could graduate debt free, but many other families made different choices or were forced to, and took out loans. I am sympathetic and I do support lowering the interest rates on these loans as much as is possible.
5
If public universities were free, I think lots more people would choose to attend them rather than a private university. When taking out loans that are already enormous, a lot of borrowers may figure they should get the most "prestigious" college for their buck and thus pay more. But if they didn't have to pay for college at all? You'd see a big swing away from private universities. Not enough to put them out of business--but probably enough to make many of them less exorbitant/more competitive with their tuition rate.
Normally I wouldn't advocate large-scale debt forgiveness. But this is a crisis government helped to cause--by not regulating the (seriously shady) student loan industry nearly enough, by making student loan debt non-forgivable even in bankruptcy, etc. (The other culprits are the universities who saw this free-for-all and decided to cash in by raising tuition while seriously cutting academic programs.) This has turned into an economic crisis that's holding back an entire generation. Student loan forgiveness would be to the benefit of the entire economy: real estate would be booming in no time, for instance. It's worth serious consideration.
If people had been allowed to discharge their Federal student loans in bankruptcy we wouldn't even be having this conversation. Thanks to politicians like JOE BIDEN and all the other politicians owned by the banks, this was not allowed to happen. People's credit rating would have suffered accordingly and others would not be complaining about the unfairness of it all.
2
The system could be greatly improved without outright cancelling the debt.
First, the amount borrowed could be capped at some reasonable limit, say $35,000. This would save the student from strangling debt and help bring down college costs.
Next, a portion of the students before tax income, say 10%, could be withheld for loan repayment. Just as with an IRA.
Finally, for the sake of the economy and housing market, any remaining balance on the loan would be forgiven after some time span after the student leaves the degree program, say 15 or 20 years. People who have no real income during this period of repayment probably would have defaulted on their loans anyway.
2
Many medical and dental students have over $250,000 of debt. How will your miserly limit allow them to become doctors and dentists?
While Sanders and Warren are fixing things I'd like to see them limit the interest rates on credit cards. I suspect it would bring relief to a lot of people. Many years ago I ran into issues with credit card debt. It took time and effort but I cleaned up the mess I made.
It is astounding that banks can borrow from the government at a very low interest rate and then lend that money to consumers and charge an interest rate 10x the amount they pay.
3
Why has no one to my knowledge pointed out that forgiveness of a debt creates income to the debtor and is taxable? Those whose student loans were wiped off could well be surprised by significant tax liabilities, due right away.
5
I am ambivalent. On the one hand I spent 9 years working abroad to pay for my three son's university. That was approximately US$ 300,000 that I would like to have put in a retirement account. So it does seem a bit unfair.
However, my daughter-in-law came from a family that could not help her and she and my son are struggling to pay back her student loans. It is really tough on young people trying to get through school and make a life.
I worked my way through college but in those days, working as a painter, welder's helper, etc. and going to school was hard but now days, it would be impossible to make the kind of money needed to pay for school. For sure my little day jobs could not enable me to pay for US$ 100,000 of college tuition, etc.
Whatever is done with the student debt I hope they do the most important thing, which is get the cost of a college education under control.
4
Lets lower all student loan interest.-the fed can create an interest rate structure, just like mortgages.
let's make all student loan interest deductible up to a cap, like mortgage interest.
1
@R. S.
You might have grandchildren who will benefit from free tuition which would make your daughter’s life easier since she won’t have to pay for her children’s and your grandchildren’s education. It’s a win for some people right now and a win for some people later.
That and there should be a cap on prior and current student loans’ interest rates.
1
There is a special place for people that want others to pay for their mistakes. Getting all the money back from the colleges might sound great, and just asking the government to pay for it is always popular. Then all the taxpayers are forced to pay for someone else’s mistake.
This creates a greater issue: If the select few that got into college get such a deal, why can’t the bums sleeping on the sidewalks of San Francisco, Portland OR, Washington DC get a deal for perhaps $20,000 per year?
I am a fan of Elizabeth Warren and as a former college professor, she has been working on getting “free” money for all those people that have college debts, but seems to have little interest in the millions of American workers that have skilled union jobs, Nursing Degrees, Truck drivers, telephone repair crews, solar electrical workers, high tech manufacturing, police work or the military. We disagree on some things, but she still has my vote for President.
Our youngest daughter Has just become a Registered Nurse and after 4+ years of work and has a very modest school debt. The low debt is because we spent our retirement funds supporting her education. Don’t you think we could qualify for a refund?
If you always pay for someone’s mistakes, they never learn to avoid mistakes. You are, in effect, robbing them of an important lesson of life. And you are creating an economic disaster for the world.
232
@Larry Lynch Seems to me that you paying for your daughter's school is inconsistent with your overall thesis of self-reliance and learning from mistakes.
52
@larrylynch as another parent who paid for my RN’s degree and, yes, is bummed that I wouldn’t qualify for this restitution...I have to remind myself and you of the greater issue and the greater good. Something must be done to reduce the debt Americans go into to get educated. Let us know when you come up with the solution, because parents eating into their retirement is only creating another problem. Maybe that’s how we’ll get our payback. Best of luck to you and your RN.
29
@Kathleen Until the high cost of college is addressed, people need to attend the college and graduate schools they can afford. I paid my college and graduate school debt - over $100K. The gov't didn't forgive my debt - I paid it back.
45
What's the point of taking the burden off the parents ... and putting it on their children? That money isn't going to just appear out of nowhere.
2
Unless you are planning on inflating the currency later on, and having a period of hyperinflation, it’s not like somebody is getting something for free, and nobody is going to suffer.
Somebody is still going to pay off the loan, just not the person currently holding it.
It will be paid via somebody else’s taxes. And / or their reduced benefits from good government.
6
@David Martin
We already give the military industrial complex free money. Heck, we didn't even have an expansion in our military endeavors, yet they got an $82bil budget increase.
Why does free education get so much attention for moral hazards while absolutely none is applied to other aspects of govt spending/taxing. Tax cuts for the wealthy, miliatary industrial complex spending are two examples of the disgusting double standards applied here.
1
Sanders won't reduce the cost of a quality education. Technology will. If I were running I would propose the creation of a new university of the U.S. federal government, delivering a wide range of high quality offerings at low cost, pooling the resources of the nation's and world's talent to make formal learning and the earning of degrees and continuing education available to all, anywhere in the world, on demand. That's socialism, I suppose.
1
"Canceling Student Loan Debt Doesn’t Make Problems Disappear" What an understatement if there ever was one. The free flow of money is causing drastic consequences to our youth and only feeding the 1% that run these universities. Not only do students get loans for college but low income students who have their college paid for can take out loans to have as spending money. I have heard nothing about the abuses going on. Enough with the band-aids, time for a cure.
2
Fix college costs FIRST.
In the last 20 years (and even more) college costs have gone up at 2x the inflation rate. If they had equaled the inflation rate college costs would be one-half of what they are now.
Some say that this is due to all of the add-ons at the schools like gyms, etc. But the costs of text books have matched college costs which shows that something is drastically wrong with the system.
Why the students aren't rebelling befuddles me as they are raising stinks about many political issues.
2
Right Norman, fix college costs first, but fix the system not just the symptom. I worked for a fair stint as a college business officer, and I can say without fear of contradiction by anyone who has seen behind the curtain that the problem is so much more snarled than anyone here has described. EVERY player in this sector (Congress, universities, accrediting bodies the arbiters of “quality”, faculty, students, donors and the public who want “accountability) has perverse disincentives to try to fix this. Online education is not the answer. Textbook cost increases are about spreading cost, but still, faculty have little incentive to choose textbooks that are widely in use. Tenured faculty and accreditation bodies are quite adept at pushing costs up in the name of “quality,” and no one can dare say anything about limiting that investment. Faculty members teach less every year and do more “service” work (meetings) and publishing, for which they must be paid. Donors put more strings on what funds can be used for—hence golden temples to sports in the same institution where adjunct faculty make less than minimum wage teaching core courses. Politicians want to be seen as wise with spending, so they make financial aid as complicated and hard to administer as possible, pushing up cost. I could go on, but the usual criticisms of our system seen in articles like this one just barely scratch the surface as to why nobody has an answer that will really fix the college cost ratchet.
2
Sounds like the medical biz.
The discussion needs to be about how we address this going forward - not about how we bail out people who have made unwise decisions, pursuing degrees that couldn't possibly lead to a career that would pay that money back.
Choosing to reward profligate behavior and penalize self-reliance cannot build our society.
The only way to give a handout of x dollars to pay off student loans, fairly, would be to give all citizens x dollars, whether they have student loans or not - including those that did the math and didn't pursue a worthless degree, or those that worked to pay for their education with minimal/low loans, or those that got degrees that could support a career that would be remunerative enough to pay back the loans.
Those that have student loan debt they can't afford to pay also have, ipso facto, an income so small that they are not paying meaningful taxes - so not only are the same people that managed their finances successfully going to have paid for their own education, but under these plans they are going to be the ones that pay off their peers' folly loans.
Going forward, we must make changes so that loans can only be taken to pursue degrees that will provide sufficient income to pay them back - if one wishes to study Art History, it should be as a minor, whilst majoring in teaching, e.g.
Is it too much to ask that someone who is "college ready" put together a business plan showing how the difference in income with their proposed degree will pay their loans?
4
So police, firemen and teachers aren’t worthwhile?
6
@Michele Passeretti
In pursuit of the almighty dollar, artists, teachers, social-workers, and entrepreneurs would not get our support. Pretty soon disabled people won't be worth educating at all considering their cost to society. We are $$$ bills, not human beings, in our glorious Republic.
For a country that hasn’t yet figured out that they are no longer rich, it is an interesting idea.
Debt forgiveness, payouts to farmers to ease the impact of tariffs, financial support to foreign countries, etc., etc., etc.
When will the dollars be sent my way so I can pay off the mortgage?
I want my piece of the pie.
9
Germany has free college. Costa Rica has free college, graduate school, medical school, art school; whatever their citizens want anywhere on Earth, the Costa Rican government is happy to pay. So, enlighten me, NYT author, what were the unintended consequences of last year's give away to the wealthy which is just as big and happened easily? What were the unintended consequences of bailing out Wall Street a decade ago (beside the predator Mnuchin running our treasury)?
6
If Trump has proven anything to me, it is the value of an education. Educated people are more likely to vote against Trump. The Blues need to subsidize education as much as possible. It might be the only thing that saves us from our selves.
3
You take out a loan. You pay it back. That's what a loan is.
6
Politically, as well as economically, Sanders' and Warren's plans are a very big mistake. As the comments here demonstrate, it is simply not fair to forgive all current college debt and leave those who scrimped and saved to pay off their loans feeling that they've been short-changed.
They're right to feel that way. These plans are unfair.
10
Hogwash! If we can suspend our own immediate sense of “what about me” society certainly should do this. Forgiving student loans allows them to buy more cars, housing and movement to the next life stage - marriage and children. Overall, those benefits eventually spread thru the whole of society. What your argument essentially boils down to is why cure cancer now when my uncle had to die from it?
The larger issues are (1) how to pay for this program, (2) how to prevent future loans like the ones forgiven, given the ridiculous cost of a college education these days and (3) how a Trump will turn this into a culture war/ socialist handout.
4
This plan has a racial component. What are the demographics of student loan debt holders? I don’t know but my instincts tell me this policy would benefit mostly white, middle class students. Maybe the “wealth tax”, (which would be a very tough sell in Congress) revenues may more justly go toward reparations for slavery.
There is also the issue of why people feel they need a college education. It’s true, most do. But ask any prof at a state college and you will learn that the first year of college for most is about gaining the academic skills that should have been mastered in high school but weren’t.
College is a business, like selling hot dogs. They exist to make a profit for themselves rather than to educate and enlighten society as a whole. Why should the government be supporting this business?
3
We need to remove interest from student debt.
5
Does “cancelling” student loan debt mean paying off all the banks who lent the money? Is there a moral hazard here? Will it cause future student loans to have higher interest rates, or be more difficult to get?
1
Terrible ideas from two people who have no idea how the real world actually works but only how they wish it would work. Never mind the moral hazard associated with this move. Isn't it bad enough that the government's involvement has inflated college prices?
8
Terrible analysis. If public programs remove tuition, more people will attend them, reducing private debt (and likely raising the quality of public programs with the addition of those students). Those who still go to a private program then made that choice, and the resulting debt is reasonably theirs to manage. Or we can all just worry about someone somewhere getting a benefit we missed and get nowhere.
4
Getting out of bed on any given morning can have "unintended consequences" and yet get up one must.
5
"most student loan debt isn't taken out to attend undergraduate programs at public colleges and universities."
*Next Paragraph* "According to the Department of Education, only 45 percent of student loans are used to attend public colleges."
Pretty sure that 45% while not the majority of student loans is still the largest category between public, private, for profits and graduate schools... not significant at all.
3
The reality is that a) a lot of student debt is held by professionals who can pay it off and b) or people who have made remarkably stupid choices.
Social work degree from an expensive private university, when your local state school offered it for half as much? Second or third tier law degree or unfunded humanities PhD, despite being able to find out there were no jobs with a brief google search ? University of Phoenix? Unfunded MFA? Taking out loans for a degree you never bothered to finish? Using student loan money to go to concerts and party all summer?
These things are not the taxpayers' problem.
Most student loans are held by graduates who have successful professional lives and can pay them off. Sure, they might need to postpone another trip to Disneyworld or having a 50k wedding, but welcome to grown up life.
Others are held by (or non-graduates) who either should have never gone to college in the first place or who made breathtakingly dumb choices spurred on by magical thinking.
Either way, asking hard working and responsible people, who have made good choices about their major, paid off their debts, or started a business or learned a trade instead of going to college, to pay off these debts is a gross injustice.
And it does nothing to change our broken and bloated system of higher education or the "I deserve to follow my dreams" mentality prevalent among so many young Americans.
11
Agreed. Everyone who ever wanted to major in dance does not deserve our tax dollars to find their dream. But be prepared for angry people who disagree.
4
It is amazing the mental gymnastics some commenters display in their bitter opposition to INVESTING in America's Future. It's like they are acting vindictive because they "had to pay".
The Scandanavian Model in Sweden Norway & Denmark CLEARLY are a success as I personally have witnessed over the past 30 years teaching at a world renown music school. And NO they are not Godless Communists..,
I have worked with students from all over the world and personally can attest to the fact that American students are at a clear disadvantage being overwhelmed with debt right after graduation.
How exactly are they going to be able to afford their own home in that situation???
7
@Marek Edelman
"How exactly are they going to be able to afford their own home in that situation???"
There are many negative consequences to our current situation. Apparently, only the negatives of proposed changes/solutions is worth discussion.
All the social stats indicate that home ownership is delayed. Number of housemates/room-mates are increasing. Savings/Retirement funding is lower. Birth rates, lower. Debt higher.
All against a backdrop of stagnating wages.
I prefer the Warren plan as a more tailored approach. I'd actually like to see the program enacted as an ongoing investment in education. You can attend a public school free. However, you'll still receive a public subsidy to the tune of $50,000 for pursuing private or specialized education. Do you know what it costs to become a teacher in a public school system? Do you know what these teachers get paid?
In New York, you can expect about $60,000 starting salary IF you already have a masters degree. You might hit $85,000 in about 10 years if you're lucky. After cost of living, there is absolutely no way to afford the expected level of education required for these positions. That's just one example too. I have a 4 year bachelors, 2 years advanced technical training, 8 years professional experience and HR departments are still giving me a hard time about minimum work requirements!
Neither plan is creating a generation of lottery winners. They are both bailing out a generation of economic losers. We drew the wrong straw when it came time to enter the economy. Debt forgiveness is attempting to correct a structural failure in our labor market. That's not winning the lottery. That's an apology for messing things up so badly.
3
My daughter just paid her last installment for her student loans yesterday. She sacrificed financially for the last five years to "pay her dues". Will Bernie reimburse her too for doing the right thing? Or will she no longer count? Best he think a bit deeper on this proposal.
9
We shouldn’t give student loans for room and board. There is no reason to mortgage your future to pay for living expenses for four years.
If you must borrow for room and board you should attend a commuter school or community college for at least two years and only those with a GPA higher than 3.0 and major in field that is employable should be eligible. American tax payers should not subsidize room and board.
5
@Deirdre many students do not have the privilege of a free place to stay while they attend a commuter or community college. Most students still need to rent an apartment and pay for food in this situation (what you call “room and board” as if this is a luxury expense). Full time students often do not have time for a job that covers their living expenses while completing school. Other students cannot find a job that has flexible hours so they can attend classes. Or they cannot afford a car to get to said job. The jobs available to students are likely part-time and minimum wage, meaning they can barely afford an apartment and food unless they work more hours (which may not be offered to them) and take away time from being able to study and get the 3.0 gpa you demand.
College may or may not be the best path for an individual, but it’s unfair to rule it out because their situation requires them to borrow money for living expenses while in school.
1
So the kids that live in rural areas shouldn’t go to college?
2
It took me 13 years to complete my undergraduate and graduate degrees. I went at night and on the weekend while I worked full time and paid my own rent on a 300sqft apartment. I didn’t have the luxury of free rent or free tuition but I have my degrees and a good job and there was nothing unfair about my situation.
We all have challenges. My dad died my senior year in high school. But that didn’t give me license to go into a debt I could never repay.
2
If my adult children were going to college now I would say borrow, borrow, to the max.
1
It doesn't make ALL problems disappear- but a great many, and among the most critical. Both my children are paying debt, and neither enrolled in majors that are totally unmarketable. One is saddled with $60,000 on a 25-year program that is choking his ability to progress. The other only owes $25,000 and can manage, however we, as parents owe the $80,000 in a Parent Plus loan, that because of economic downturns, we've had to consolidate to a 25-year loan. (ha joke is on them- we'll be dead by then).
Yes- my children's friends who are teachers or engineers or PAs or doctors or lawyers and who work in low-income schools or hospitals or government agencies or have high incomes can pay off their debts- most cant.
I work with low income undereducated clients, most of whom are duped into taking out high interest and exorbitant loans to become medical assistants that will pay about $13/hr- thus will not have a snowball's chance in clearing their debt.
4
From a political point of view, a responsible reader will prefer Warren to Sanders, noting that Sanders yet again is promising a pie in the sky, and Warren is looking to solve a problem. Sanders appeals more to the gut, and Warren to the head. Does that mean she has to lose? It's up to you. At least she's better than Biden, the Senator who pushed to prevent individuals from declaring bankruptcy because his state housed all of the credit card companies.
2
Since we, taxpayers, are going to be on the line for these loans, I assume we get to have a say in how they are being spent? I, personally, would like to put an immediate stop to freshman diversity seminars and mandate, instead, seminars on the Constitution and Bill of Rights. And maybe a freshmen seminar on personal responsibility for good measure. Since we're paying...
8
Canceling student debt does nothing about the cost side of the problem. Colleges and universities have been raising prices for very questionable reasons for years. That simple has to stop. Maybe the federal government should handle tuition and fees the way it handles medical costs for Medicare: you can get a loan, but only for a college that charges reasonable costs and that doesn’t inflate prices by adding frills or by hiring more development staff to milk donors dry.
4
@Roy
It might increase costs. We know how consumers behave when their risks are reduced.
4
I think college AND trade schools should be less expensive but I don’t like either of these plans. I think it should have some sort of merit base, such as you get paid back if you graduate with a certain grade point average. Plus students going into highly needed professions such as becoming a doctor, nurse, dentist etc could get a special tax break for a period of years once they graduate. I was a non traditional college student and there were many young college students saying I don’t have to study because my program is free, sometimes parental funding but often a governmental program footing the bill. The student needs some skin in the game.
3
Federal student loans were meant to provide low income students and families with the means to attend college, but these loans are just hyper-inflating tuition costs for everyone.
19
It seems that whenever the government does something with good intentions, like guaranteeing student loans to help lower-income students could have access to higher ed, it doesn’t take long for the hyenas to come in and game the system until it can’t do what it was intended for, and exacerbates the underlying need for the fix in the first place. Blame Republican state legislatures for cutting higher ed budgets at the state level, forcing colleges and universities to rely on ever-increasing tuition and fees, and competing for students by turning campuses into resorts. Blame colleges for their outrageous administrative salaries and not even to mention coaching salaries. There’s lots of people who made lots of money by gaming this system. Get the money from them.
I can see how the US would find free tuition daunting. You have a for profit medical provider system and still struggle with the vision of providing medical care for all. Believing that you don’t have enough money is a very difficult obstacle to overcome and I mean that sincerely. It’s both a personal and social political problem, so it can run deep.
I hope you achieve both the medical care for all and the free tuition. I hope my country finally achieves free tuition. We should have achieved it ages ago. That’s what Canada will think we achieve free tuition.
3
I've read lots of interesting comments to this article, both for and against Sanders's and Warren's plans. Yet no one has examined Sanders's political purpose of "one-upping" Warren. His purpose is too keep too many of his young supporters, who are a significant constituency in his base, from migrating to Warren.
7
Nobody is taking into account how the universities will cut their costs. What we see with public universities is a price-fixing scheme. They all charge about the same amount of money, regardless if they are in New York or North Dakota. Tenured professors teach about 15 hours per week, but enjoy lifetime employment and huge benefits, six digit salaries and opportunities to start their own businesses during their "work hours".
So, will the universities agree to cut their costs by 50%? That would be their "fair share".
3
I am a tenured professor. I teach 12 hours per week, and it takes me about an hour and a half to two hours to prepare for each class. Then, I have grading to do, which also takes at least 12 hours per week. I have office hours (sometimes no one shows up, but sometimes students do). Then there's advising and mentoring. Plus, I have committee work. Then, we have program, department, school and university meetings. I squeeze in research whenever I can. My benefits age good, but I don't make anywhere near 6 figues annually. So where would I find time to consult or have another business on the side? On the weekends? I am usually catching up on grading or spending time with my family.
I will be paying back my student loans (undergrad and grad) until I am 57. Worth it? Yes, because most days, I like my job, and I borrowed what I knew I could pay back. My family was working class and couldn't afford to send my to fancy private schools. Careful financial planning and advice are essential, not across the board loan forgiveness.
1
The Sanders and Warren student loan give-away proposals are like every other give-away program.....poorly conceived with many undesirable and often unintended consequences. The proposals are nothing more that efforts to buy large numbers of votes for the proposing candidate and his/her party.....votes all purchased with money forcibly taken from taxpayers.
9
We borrowed $20,000 in 1988 so I could graduate from the University of Michigan Graduate School of Business. We paid $168 a month for ten years and the loan was paid off fairly easily.
This loan amount was very reasonable given our income and the jobs I was able to obtain because of this degree.
If we had borrowed $100,000, the monthly payment would have been $840. If we had borrowed $200,000, the monthly payment would have been $1,680. At these borrowing levels, paying back the loan would have become a problem and we would have had to consider whether the debt was worth the graduate degree. To borrow money without considering your ability to pay back the loan is probably why we are having this national discussion now.
18
@Jon - so maybe include the 8% interest rate on the loans. Yes it is that much. Unsubsidized student loans have an interest rate between 6% and 8% and the interest starts accruing immediately. That is what we are doing to our kids. It's a disgrace.
4
@Jon
Not just the higher interest rate. Life happens. You take out loans to pay the tuition, since you're already working full-time to pay you and your family's living expenses. That's right. You're forgetting about the married students with kids. Life happens. There are many things you can't predict.
Cancelling student loan debt? What about the students who paid to go to state schools, because they couldn't afford the big-name schools, or get student loans? I believe a more nuanced approach is appropriate. Maybe cancel after 10 years of paying a certain percentage of your income towards your debt. Maybe begin paying community college for everyone. However, you don't just cancel debt for those who have loans, leaving behind those who went into other debt to pay for college, or those who chose less expensive schools because they couldn't get loans.
18
@ATronetti - both candidates stress this is public colleges and universities only. You want to go to a private college, well that's on you.
1
Going by the numbers presented, 1.4 trillion over 44 million borrowers works out to be around $36,000. Last year, the average price of a car (light vehicle) sold in the US was $37,500. So people seem to be OK with paying for a car, but expect that all higher education should be free?
There are certainly very valid points to be made about making college affordable, but as many commenters have pointed out, there needs to be a broader discussion on the merits of college and choices involved. Indeed, as a fan of Sen Sanders, I am disappointed that he is discussing simplistic solutions (erase debt), rather than creating a sustainable and workable plan.
11
@newton
An educated populace provides all sorts of benefits for society.
Lower crime rates, higher incomes, higher rates of planned pregnancy, lower rates of hate crime.
It's worth it for society to invest in education so that it can reap these rewards. Obviously, loans for consumer goods such as a new car is a dumb comparison.
1
The evils you speak of are the costs of poverty. Poverty is systemic and although rates of educational achievement have increased dramatically over the last 50 years, rates of poverty remain constant. Education is not the answer to poverty, and the notion that it is infers that the poor have brought their poverty on themselves.
Higher Education needs to return to its traditional purposes of teaching students how to think and how to become good citizens.
Courses of study that lead to marketable degrees should be entirely paid for by the student. (S)he is purchasing information as an investment and expecting a return. Certainly the tech sector could invest in the job training of its future workers, rather than expecting the taxpayers to subsidize them.
Courses of study in traditionally academic disciplines like the humanities and the arts should be free because these courses benefit the society as much as the individual by passing on our common cultural heritage, an essential part of personal and political identity, from generation to generation. This is at least as important as cell phones and Alexa.
@WallaWalla, being in academia myself, I fully understand and appreciate the need for an educated populace. That is not my point.
Further, I am not conflating a car purchase to a college education. I am merely pointing out in broad financial terms how the "value" of student debt may be compared to other debts people dont seem to have any problems taking on.
A loan is a contract. The government has no business interfering. I think it may even be illegal. But that never stopped them.
11
The government is on the other side of the contract. No private lenders are involved. None have been since 2010.
Move loans toward cost of money. The interest rate charged on student loans shouldn't be higher than a mortgage or car loan rate. Congress could come together and set student loans rates closely tied to the rate the Federal Reserve System charges banks to borrow money. i.e current Fed Fund Rates are 2.5 percent.
12
@CliveB
" The interest rate charged on student loans shouldn't be higher than a mortgage or car loan rate. "
Of course they should. Student loans are made to young people with no credit history or income, and have no collateral to support the repayment risk. That why the rates are higher that loans with collateral.
We don’t need to cancel student loans. People need to own their debt.
We need new rules. Eliminate interest and fees. Cap payback to ten pct of income for ten years.
My family chose a smaller house, cheaper cars and went years without vacations to save for college. Those that didn’t shouldn’t be rewarded.
27
Here in France university education is relatively « free », but too many students end up with degrees in art history or something else which is interesting, but won’t lead to a career.
9
@David Martin
Unfortunately, they do that here too at $50-60K per year.
3
I want Bernie to advocate for equality of opportunity for all. I commend him for his proposal despite having reservations. I prefer Warren's wealth tax. It's easy to see student loan (debt forgiveness) converted into higher discretionary expenditures ie, better for the economy. What I need help understanding is how will a person who opted to go to State U. (less expensive) & paid for school by working two jobs is also rewarded? What do you tell all those implementing this today to help them rationalize the effectiveness of their current efforts? In the past, self imposed biases have kept me from having an open mind. How do we get better at something we don’t think we’re bad at? Most politicians inability to be transparent isn’t a coincidence. One has to be selfless & egoless to give perfect guidance as to where to draw the line since it exposes your preferences & biases. How dow we proceed if we all draw our lines in different places? Instead, should we do nothing? Wouldn't silence help since the first rule of negotiation states that if you are the first one to offer a number then you have set the anchor & the negotiation will revolve around that number. Let us by all means seek to increase opportunities for all. Bernie & the Democrats in particular, have to do a better job of acknowledging and/or recognizing we have to proceed knowing to increase opportunities for all is likely to favor those better able to take advantage of them and may often first increase inequalities.
2
With a free option for public schools, wouldn't the number of private school loans decrease significantly?
Main Street bailed out Wall Street during the foreclosure crisis, now its time for Wall Street to bail out Main Street during the student loan crisis.
PS - with improved statistics regarding default rates, the Dept. of Ed's portfolio is worth nowhere near 1.6 trillion (very similar to the mortgage crisis inflating the value of mortgages with high default rates)
4
I am one of those American's whose student loan debt is from graduate school. I graduated from said graduate school more than 15 years ago, and I still owe a substantial amount. I pay every month faithfully, and it is not an insignificant amount. I don't expect to benefit from any loan relief program, and luckily I can afford the expense.
The idea that Warren and Sander's plans will only benefit the young is foolish. Millions of middle-aged Americans are paying debts from their early twenties. It would be a huge relief to large portion of the adult population.
11
So, this free college nonsense just costs too much. I suppose that's true of education in general, so let's just make everyone pay for high school, and maybe grade school, too.
4
I am wondering, after struggling to pay my daughter’s tuition with no loans, what about me? I should have just let her borrow the money and someone else would have paid.
If the Democrats, of which I am one, think this is going to get them elected I have a bridge for sale.
36
@Jim So because you personally wouldn't benefit from it, you wouldn't vote for it? What about your grandchildren? The rest of your friends and family?
3
Students and families who take out huge amounts of debt with no realistic plan for how to pay it off are making a bad investment. We all make mistakes, but the standard remedy for bad investments is bankruptcy. If you take on $100,000 in debt to end up with a law degree, that's probably a bad investment. If you take on that much for med school then it is an okay investment as long as you plan on entering a specialty that will allow repayment.
I think that a possible remedy is restoring the ability to apply for bankruptcy combined with free public college tuition. Students should be able to apply for public assistance while attending college and grad school, perhaps with expansion of housing assistance. We might also talk about loan forgiveness programs for those in public service or providing needed services. Maybe doctors who become general practitioners, teachers, or aides for disabled kids in schools could qualify while those who become heart surgeons could pay their debts.
Forgiving all outstanding loans reinforces poor planning and bad investment decisions and penalizes those who paid off their loans or paid for a child's education, often through great sacrifice. It penalizes those who made better decisions like attending community college for 2 years then transferring or going to a lower-cost state university.
8
@JO "We might also talk about loan forgiveness programs for those in public service or providing needed services."
I completely agree -- except we already *have* loan forgiveness programs for public-service work, and the requirements for them are so overly onerous (e.g. working for 10 complete years in the public sector without missing a single payment, solely working for government agencies or specific types of nonprofits, etc.) that only a few hundred people per year manage to qualify for loan forgiveness.
Btw "public service work" doesn't include GPs or anyone who works as a medical doctor, except for the tiny fraction of them employed by the federal government (e.g. doctors in the Armed Forces). ANY work for a for-profit entity, even if it's for the general betterment of society, fails to qualify -- including work for hospitals that receive some degree of federal funding.
2
They have cut the loan forgiveness for public service too. We’re very close to having none at all.
None of this addresses the reasons why universities have gotten so expensive in the first place
27
@Peter
Yes, excellent question. As someone who works in higher education, I wonder all the time where the money goes. I work at a not-very selective private university and the bloat at the executive level here is unbelievable. Our president is in the top 10 of all university presidents earnings, and yet we let in over 70% of applicants. The rest of us got a 2% raise. I've seen positions in the Boston area requiring a master's degree, paying in the low to mid 40s. A cell phone store manager with only a high school diploma makes more!
8
@Pete, At the state universities in Connecticut you have layers of well paid administrators and political hacks dumped into jobs. The Last Gov. Malloy, got his Chief of Staff a job running the university system. Zero qualifications for the job. The Lead Chief Financial Officer is another hack. 325K jobs so they can collect a pension.
1
Speaking as a law-school graduate with over $200,000 in student loan debt, it's stating the obvious that I'd love it if my debt was forgiven. Nonetheless, I'm not convinced that any such program is financially feasible -- certainly not for professional students, but likely for undergrad and grad students as well -- nor would it address the core problems relative to higher education generally.
The biggest one by far, in my view, is interest rates. The Fed's rate was close to 0% for the majority of the past decade, and didn't rise above 1% until 2017. I attended law school between 2012 and 2015, a period during which the Fed rate was no higher than 0.2%. Why on *earth*, then, am I paying interest rates -- entirely on federally funded loans, no less -- at APRs ranging between 6% and 8%?
Assuming complete loan forgiveness isn't financially realistic, how about simply forgiving all (or even most) of the accrued interest on existing student loans -- coupled with charging APRs pegged to the current Fed rate for loans given to current and future students?
In effect, the federal government at present appears to be generating profits off the backs of this country's leaders of tomorrow. Put simply, this is unconscionable.
59
@Jeff - I agree completely. Image my shock when my daughter went to school and took out a student loan (oh sorry all you rich folk, yes I work and so does my husband but alas I could not afford the tuition - I am a horrible person according to all of you) anyway, her interest rate on the unsubsidized loans (yes we did qualify for work study and subsidized student loans - its called unemployment for all you rich folks) was 8% and started accruing immediately. Not in four years, immediately. What country does that. Oh right. This one. Pull yourself up by your bootstraps, if you have any. Otherwise - tough.
7
@Jeff Agreed! I'm not asking anyone to pay for my decision to go to grad school. It was mine, and mine alone. But words cannot express the gratitude and financial relief I would feel if they would just lower the interest rate to 2%, give me an income-driven payment plan to pay what I could for 10 years and then, maybe, forgive it at that time. I say let's address that part of the problem first and then work on the bigger, long-term issue of making school more affordable across the board. It's obscene what universities charge and how little they pay their adjunct professors. I know because I am an adjunct, cannot live on the wage paid to me, and am forced to take other jobs like many of us must do in this gig economy (another financial reality that will rear its ugly head in years to come as people get tired of having to work several jobs to survive). I would love to have my student debt eliminated but I don't see how these politicians will be able to sell that idea, let alone realistically make it happen. Their intentions may be noble but they know proposing the idea sounds great to a lot of people who are genuinely desperate for student debt relief and may translate into votes for them.
5
In my opinion, there are way to many people for whom a higher education has been useless.
Let's not forget that a career in the trades can pay just as well as white collar work. In addition, spurious and speculative loans are not required in order for a sketchy piece of paper in order to get hired.
No doubt student loans benefit, but it appears as though many students are using loans to pursue unrealistic careers.
3
If you are going to forgive student debt, you have to include other groups: farmers, those homeowners still underwater who were shafted by Obama, payday lender victims caught in an endless cycle of debt, and so on.
"Debts that can't be paid, won't be paid"
6
I am saddened by the unbelievable disregard for our fellow citizens that I see in this comments thread. Nearly every person I know who is in his or her 30s and 40s has student loan debt. None of us majored in "basket weaving." None of us was an excessive partier in college. Yes, we all went to parties. That's what many people do who live in a community with other people. The students who do the "hard partying" that student loan borrowers are accused of so often are more likely to be the students who don't have to borrow, whose parents are footing the bill not only for their tuition and fees but for their leisure activities, as well. Maybe once upon a time (1970s? 1980s?) student loan borrowers got cash payouts from their student loans, but I would wager that today most if not all money borrowed goes to the school to pay tuition and fees. Who benefits when we can't buy homes because we're paying 40% of our income for the rest of our lives to a student loan servicer? How do our communities benefit when we can't save for retirement? Student loans don't just cause injury to those who are saddled by that debt. They harm everyone, in every community, in the entire nation. Your cruelty towards student loan borrowers doesn't just harm them. Everyone suffers, including you, when you choose to be cruel to your fellow citizens.
255
How is it not cruelty on your part towards me to expect me to not only pay for my college degree, but yours as well? I didn't co-sign on your loans. Isn't it cruel to snicker at me for being such a fool as to pay my obligations, while telling me to pay yours as well while you walk away?
75
@Rob College students know what their college tuition costs before they sign for the Notes. It is not my responsibility to pay for others' student loans. I paid mine (without help from my parents), everyone else should pay theirs. This is not a socialist country.
48
@RobOur 41 year old daughter didn't have any debt because she chose a school that we could afford. She made Columbia and Brandeis, and we could only afford Brandeis which is where she received a great education. We also made some financial adjustments so that there would be no debt. I agree that public colleges should be free as a choice for those wanting a good education and little or no debt. But what lesson are students learning when they can run up debt knowing that it will be wiped out with no consequences?
41
More "free stuff" that has to be paid for by the US Taxpayer. College is not "free" for anyone. Someone has to pay for it. In the European countries where there is free tuition, it's not open borders for everyone - not by a huge stretch - it is highly competitive, only the very brightest and most motivated get in. Reality check everyone! And we are $14T dollars in debt!!!!!!!!
19
So why does everyone just want to pay off loans, and no one seems to wonder why the cost of post-secondary education consistently rises 8% per year?
Consider healthcare. Millions of pages have been written about what drives healthcare costs, and many things have been tried to control costs (albeit with limited success.)
Why is there no similar investigation of college costs? To me it is completely a mystery why they have gone up so much. Professors are not making more, there aren't more of them, and I don't see any other obvious reason that cost increases so greatly exceed inflation. Where is the discussion around this? Why do we seem to have so little concern around the reasons we have to borrow more and more to pay for college and graduate school?
Simply paying off loans without any attempt to understand what is driving costs will not work for post-secondary education, just as it would not work for health care.
24
We spent $3 trillion murdering Arabs and Afghans over the past 16 years. We can find the money somewhere.
11
@Kinderplatz
The amount of the Pentagon's budget increase, $82 billion, could have funded Bernie's program to make public-universities tuiton free more than one time over. For some reason we never got an analysis of unintended consequences of that enormous allocation.
11
Education is a human right. I do not believe that we should normalize suffering financially or making exceptional sacrifices to receive an education. Many financial values are subjective. For example, everyone has his or her own opinion about the definition of “frugal,” and “middle class.”
We need to address multiple issues with student loan debt including (feel free to add to this list):
• the cost of tuition and fees,
• the cost of living,
• federal funding,
• state funding,
• scholarships,
• grants,
• employment while being a full-time student,
• employment while being a part-time student,
• family support,
• family and friend networks,
• generational affluence,
• generational poverty,
• financial literacy,
• budgeting,
• saving,
• investing (is education an investment?),
• principal,
• interest rates,
• repayment plans,
• defaulting, its effects on the credit score, the ability to buy car/home, the ability to receive a line of credit/loan, and employability
• bankruptcy,
• public service,
• poverty v. minimum v. living wages,
• the community college pipeline,
• professional licensure degree and experience requirements,
• vocational/trades apprenticeships and qualifications
We need to address the following domains associated with student loan debt:
• past,
• present,
• future
Candidates who are addressing any or all of the student loan debt issues certainly have my vote!
4
@Katie Primary and Secondary education is a right, not college. That is something that is earned, either by yourself or through other people/programs. It's not free; someone has to pay for it. It's simple, if you can't afford to go to a 4-yr college, don't go. Go to your local community college for a fraction of the costs and then transfer, saving you some money. No one said you "have" to go to college to get a good job. Personally, I worked two jobs and paid my way through with no debt in the end. If I had no money, I didn't take a class...simple. Stop crying that you signed on the dotted line and now can't afford the life you wanted. Stop spending money you don't have.
9
@Katie I think we also must address the lack of transparency and predatory lending practices that come with both federal and private loans for college. No one would lend me 30,000 at 18 to buy a car with no credit and a fast food job. Why does the government so willingly hand out huge loans to young people who can't fully understand the consequences? I believe all loans should come with some kind of disclosure saying what you're expected to pay monthly after you enter repayment. If they did, I'm sure a lot more people would think twice about borrowing.
5
@Bill C. "No one said you 'have' to go to college to get a good job."
Tell that to the large majority of American employers who won't even *consider* hiring non-college-grads for positions above mailroom or admin work.
"It's not free; someone has to pay for it."
Someone has to pay for primary and secondary education as well -- even if they don't have kids of their own. Why does it make sense for taxpayers to cover this expense -- which will likely yield little ROI absent continuation to higher education -- but not the costs of the college degree that are effectively a prerequisite for well-paying jobs?
Also, keep in mind that it's the taxes from those jobs that'll end up covering most of your own future Social Security benefits and Medicare costs. Your own Social Security taxes will likely only cover your expenses for 10-12 years post-retirement; the remainder will effectively be the same as welfare benefits.
Or would you be willing to forgo Social Security payments beyond your personal contributions into the system if it meant not having to cover others' higher education costs? I'll hazard a guess the answer is no.
3
"Canceling Student load debt doesn't make the problem disappear" but it certainly helps a great deal. Why a student can actually come up for air sort of speak and consider their surroundings rather then trying monthly to make that nut (amongst everything else). They can consider running for a government position, take up the fight for cleaner air and water. They can even dare to speak their minds despite their employer's political stance without fear of losing their job thus losing their ability to pay off that student debt. They can also fight to drive the bulk of national spending towards making better Americans rather then making better bombs and wars (to keep that cottage industry running). This savings would pay for their education debt and insure future grads free tuition and a chance to shape the world for the better."Oh, the things they will see" fit to work towards if they weren't straddled with thousands of dollars of debt upon graduation. If only there wasn't so much blindsight and better foresight.
5
Education, at least the cost of tuition and study material, should be free regardless. Government should be in the business of making money from those who have nothing.
Communization is replete with unforeseen negative consequences. Much of the national wealth would be directed by law out of taxpayer hands and into universities, who would form part of the government and power structure (power to confiscate wealth).
I instead favor making student loans dischargeable in bankruptcy going forward, but not for the existing, highly subsidized loans. That would be synonymous with a federal giveaway of free money. But I do favor loans priced so unattractively that people understand the terrible mess they are getting into. A loan dischargeable would have at least 18% interest, like a credit card. People would understand that a student loan is foolhardy and feckless. People would be approved only for a small loan, limiting university greed. Maybe $25k Max, $8k average. Tuitions would plummet. This would be a great boon to affordability.
There is a great deal of fat to trim out of the system. Enormous amounts. Making loans dischargeable and sharply curtailing federal subsidies/giveaways would do just that. No one denies that tuition was far more affordable before this subsidized loan boondoggle began. Literally I think no one believes that. People ought to be paying low, cash, tuition and not loans. I am a banker who has worked with student loans and understands the subsidies and affordability issues involved.
4
Actually 40% of students taking loans for state colleges is a whole lot of people. All the debt is NOT all about the elite colleges. I am not sure the numbers in this article add up. Meanwhile it seems that too often. proposals about economic justice too often get the wary, 'unintended consequences' spiel, as if a bit of justice is always just too complicated. As if we can never trust somebody with ideals about justice to think the issues through. Meanwhile, Trump's tax cuts for billionaires and health care rip-off scams have STILL not been properly analyzed for the harm done to this entire society - save the millionaires and up. An educated class of young people - especially when NOT burdened by excessive debt like a bunch of indentured servants - is an absolute good. Period. And I am sure we can find our way there, like so very many countries around the world - including ones with less resources. It is actually not rocket science.
7
These proposals, canceling student debt, are problematic in many, many ways:
1. What about all those students and their parents, who worked hard, paid tuition and fees, and paid all or most of their loans? How are they to view a massive gift that comes to other students who did nothing more than they did? No, life isn't fair, but these people aren't likely to feel positively towards the whole idea.
2. Why is student debt so high? It is not because the actual cost of educating people has increased so much. It is largely because the administrative apparatus of education at colleges and universities has become so expensive: deans and presidents making millions, sub-deans (etc.) making $500-750K, massive bureaucracies costing millions that are hired to support them and their enlarging empires -- these are the reasons why education costs have spiraled.
3. Without addressing the REASONS why student debt has become such a problem, one quick fix isn't going to do anything more than make a bunch of people really happy and another bunch of people really upset.
12
Where Bernie Sanders' plan falls short is that (1) colleges are still expensive and future students will still have debt problems, (2) future students are more likely to expect the next government bailout, since it already happens once, (3) if that doesn't happen, these future students will have serious credit issues on delinquent loans, (4) each of these bailouts require substantial tax-payer money.
Alleviating student debt is important, but the amount of alleviation should consider the total amount owed, the debtor's income level and the past behavior of payment, so we don't encourage irresponsible loans as a side effect of wiping everyone's plate clean for free.
I also don't believe everyone should enjoy free college education. (1) Many jobs don't require college education and some people who study on the Internet end up knowing more about the subject matter than those who attend college. (2) Even now when tuition is expensive, there are students who party through college and don't learn a thing. What would happen if it becomes a free ride for all? It is a really nice ideal that everyone receives college education, but not everyone needs it or wants to take it seriously. It's better to target the motivated students, and make sure they learn what they need at an affordable price.
There has been no discussion of the real failures of existing policy targeting student loan debt.
Bush, and subsequently Obama, implemented a series of income-based repayment programs for publicly held student loan debt. These programs cap your maximum payment at a fraction of your income. If you make nothing, you pay nothing. All income-based repayment programs forgive unpaid student loan debt after a period of 20 to 25 years of payments, longer than a conventional payment plan, but shorter than a mortgage.
The major failure of these programs, and not always the fault of the programs themselves, was their inability to enroll most student loan debt recipients and keep them on the plans. It was estimated that between 2012 and 2015 that almost 50% of new income-based repayment plan-holders were intentionally removed from the program for failing to renew. Why? The process itself was confusing or not advertised clearly. The consequences of non-renewal was almost as bad as deferment- the accumulated interest was rolled directly into the principal. Another problem is that documentation for debt forgiveness was burdensome.
To those who paid off their loans through grit and sacrifice: Don't be angry at those who receive forgiveness. The ability to pay debt depends on each person's personal situation-kids, family, jobs, life. Certainly, they are not all money mismanagers. We should all strive for a value-based and affordable education system and your blame is misdirected.
5
Like health care, education costs, especially at the university level have far outstripped inflation. Colleges charge more - because they can, not because they need to.
Can anyone seriously argue that the college experience is 10X better than it was 40 years ago? Because that is how much tuition has risen.
I lean left. But relying on loan forgiveness does nothing about this underlying cost problem.
8
Attitudes in the comments here are a great illustration of how capitalists turn people against each other.
I worked, scraped, and suffered through school, taking 7 years to complete a BS at a modest state school. That was somewhat possible 20 years ago, although my family had more resources than many. I would never wish that experience on anyone. We need to abandon these cultural myths of pulling yourself up by your bootstraps. It's far from reality, and the primary function of these myths is to inoculate against class consciousness. We are all so miserable in this system that we hate to see someone get something that we didn't have, or that there may be someone who abuses a benefit. It takes our focus off the collective benefit of living a society where students can get jobs, have families, and afford housing.
And to the point that this benefits the wealthy - most working people wouldn't ever dream of attending school because of the enormous expense. Maybe this will change that. Their participation would make our universities and workplaces better.
237
@Lee "We need to abandon these cultural myths of pulling yourself up by your bootstraps."
Agreed. Too bad another cultural myth being peddled by the left is that none of us should be held accountable for our own decisions and that everybody else should take on the financial burden of making the consequences disappear from our life. It's the same mentality that says society owe you "free" health care, even if you are a chain smoker or morbidly obese, and that taxpayers are obligated to provide child care at no cost to you no matter how many children you brought into this world. I don't think that taxpayers should be left holding the bag in order to take care of 30 year-old Amanda's college debts today because she chose to borrow money for schoole and then spent her freshman year partying every day, not attending class, finally flunking out because of her own irresponsibility. Regrettably, there are many stories like that and it shouldn't be on the rest of to clean up the mess. Don't you agree?
17
@mpound
So you would let the failings of a few, doom the many?
There is no hope for this country.
18
@mpound- I guess you had no problem holding the bag for the banks when they crashed and burned and giving them free money? What about that cultural economic myth: free money for the banks, free money for the farmers, free money for the wars in the Mideast, And by the way, no one is talking about free health care. Read what they are really saying saying about health care. Oh, lets not forget the free money for the corporations as in paying no taxes and squirreling away money in off shore accounts. Corporate socialism is your cup of tea.
The “rest of us” have been cleaning up your mess all of these years.
29
It's easy to make promises when you know congress won't let you keep them. Moral hazard seems to be the DNC's new middle name. What these primary voters should really be asking, Is there a mathematician in the house?
4
I'm one of those students that has taken out significant loans for graduate school. I also expect after graduating with a PhD in a STEM field I will be in a position to pay them back without much hardship. Yes, graduate students take out large amounts of loans, but statistically the people most likely to default are those with small loans. These are not graduate students, but undergradfactore
I would be happy if interest was cancelled on loans now and for future loans. That relief would be significant for people in my position. Cancelling student debt would give millions relief, but it won't necessarily prevent future problems. Here are some other examples of changes that would be welcome: loan repayment plans need major changes (like factoring in cost of living with income based repayment), the bankruptcy exception should end, and borrowers should be able to get reliable advice about repayment from their loan servicers (instead of being told to choose options not in their best interest or outright lied to).
5
I just finished the NY Times article titled "Forget Tanning Beds. College Students Today Want Uber Parking. "https://www.nytimes.com/2019/06/25/business/college-dorm-uber-amenities.html . This is the primary reason why college is getting so expensive and students are going into debt. Over spending by colleges to attract students who then have to pay inflated tuition costs in the form of loans for all of this bloat. Colleges are tripping over one another trying to one-up their rivals to entice students to believe their campus is more appealing than the college down the street. Stop with it all! You don't need all of that stuff to get an education. You need an instructor, classroom, books, laptop and a safe place to eat and sleep - those are your basic needs. Above that, you're just piling on debt for an experience you don't need for an education you could have done online from anywhere. I bet more than 70% of college course work could be done from online courses from an institution much cheaper than what most are paying now. If it’s the social life you can’t live without, go get a job, volunteer at a woman’s or animal shelter. Save your money and start your life with little or no debt. I’m a hiring manager for my firm and I can tell you I don’t give a hoot where you got your degree as long as you can do the work. Online or Harvard, it makes no difference – I’m only looking for the piece of paper and the ability and willingness to do the work. That’s it!
7
We have helped our daughter pay down her and her husband's college debt. Will we be entitled to a rebate? We did this because the interest rates were killing them, and we wanted our grandchildren to live in a safer neighborhood and in a nicer property. We are grateful we can do this for them, but if others are having their debt cancelled, what about those who have already paid down their debt?
6
As long as the Democratic candidates are engaged in this frenzy of who will promise more goodies, why not have the government (read taxpayers) pay for everything - private college, graduate school, you name it.
Growing up in a communist country, I benefited from free college education, then I worked for a state owned company. They had to give me a job that was not needed and I didn’t want, and I was payed, like everybody else, the equivalent of about $100/month.
But even in a communist country, the government did not pay college tuition for anybody who wanted to major in whatever they wanted. The state would provide a number of college slots trying to approximate the needs of the economy, and there was an entrance exam with extremely stiff competition.
Democratic Socialists will top Communists: the US will be full of youngsters with useful degrees in Journalism, Theater and English Literature, all payed for by Uncle Sam.
1
How silly of me to have saved all those years to pay for my daughter’s college!
4
To me the sweet-spot would be to guarantee free tuition at a state sponsored University if the adjusted gross income of the student's family is below a certain threshold - say 100,000. With a sliding scale north of that based on a families number of children and other wealth etc. This would not be a hard formula to apply because private schools who give financial aid have been doing it for years.
This would focus on the key point of such a program -- adapting the educational market to address our societies interest in a better educated workforce and to demonstrate with policy, rather than just with rhetoric, our societal commitment to equality of opportunity.
3
@Peter
Lets just have free state school tuition (or very cheap tuition---like very very cheap---the kind of cheap a student could pay with a part time minimum wage job like in the olden days) for everybody---no income caps. Stop worrying about subsidizing rich people. They won't go to state schools anyway as the ivy school entrance bribe scandals prove. To the extent rich people do go to state schools they will more than pay their way by increasing rich people's interest in supporting the schools and by providing wealthy future business contacts for their less wealthy classmates.
1
No bailout is perfect, at least this one is focused on actual people rather that huge banking entities that concentrate wealth. I say wipe out all this cloying debt and free a whole generation to move on.
Remember the GI Bill? That really turned out really well! You don't see any complaints around that one. Carey's whole argument turns on a false ethics of who "deserves" help. I say spread the aid widely, if a few "undeserving" folks get out of debt too, so be it!
15
"Canceling Student Debt Doesn’t Make Problems Disappear"
But I bet it DOES cancel student debt, right?
7
Aren’t these plans elitist? They focus on the plight of the college educated and ignore that of the 70% that don’t go to college. These noncollege citizens go on after high school and get jobs, raise a family and take out loans for automobiles and home mortgages? They’re in debt too, and they generally are not going to have the same high level of income as college graduates. It’s this class of people whose earnings have suffered over the last decades and and haven’t seen the gains of the professional classes.. How can you give free money to one group and not the other? Shouldnt the federal government assume or set aside everyone’s debts, then? Comparing these plans of Sanders and Warren to GI Bill doesn’t hold up. The GI bill was a democratic opportunity. All veterans were eligible and all vets made a sacrifice for their country.
6
@Richard many people have student debt and no degree. They're generally first generation college students from working class backgrounds. They never finished school, often due to financial restraints. They get debt without the benefits of having a degree. Debt forgiveness would help a large number of poor people, especially the working poor.
I'm a veteran, and the GI Bill changed my life. I was poor and worked full time while attending college. It wasn't working and the military seemed like my only option. I'm grateful for it, but I don't believe that young people should have to join the military or put their lives on the line for affordable education.
5
@Kate That's the major issue. If I remember correctly, roughly 40% of people that enroll in college won't finish and still get saddled with the loans, so loan forgiveness programs would actually be benefiting the working class non-college grads as much as many college educated.
2
@Kate. The article doesn’t mention the working class college dropouts who didn’t get a degree and are in debt. It would help if we knew their numbers and their indebtednes. A cold pragmatist would say bailing them out would be sending good money after bad, but with you I am sympathetic to their plight. You say the GI bill changed your life and helped you get an education, but then you say that young people shouldn’t have to go into the military and risk their lives for a affordable education.
I can assure you that canceling my student loan debt will make at least $200K worth of my problems disappear. I saved $30K to buy a home despite my $200K in student loans and my very small salary as the leader of a startup literacy nonprofit (less than $40k/yr in NYC). My org creates child-friendly reading spaces in barbershops and provides early literacy training to barbers. This is important work but it also means I’m on a social change budget.
Through hard work and savviness, I saved money with the hopes of securing a small slice of the American dream somewhere down south - home ownership. However, lenders said my high debt to income ratio made me ineligible to buy most homes. I obtained an MS in Childhood Education and an MPA in nonprofit management to better myself and to help ensure that I’m an effective leader. I wasn’t irresponsible and haphazardly taking on unnecessary debt. I have zero credit card debt and have hustled to save money, but I have no rich family member to co-sign on a house.
Home ownership is the primary vehicle for building wealth in America. In 2019, how can highly educated young people working in the social sector, instead of high paying corporate jobs, achieve financial freedom and build intergenerational wealth?
15
I attended a public university and still found it necessary to rely on student loans to pay for my tuition, books and some of my living expenses. I took on this debt while working two, sometime three jobs, at a time.
I'm still repaying my student loan debt, even though I graduated from college twenty five years ago. This debt has prevented me from buying a car (still driving the same one I bought in 1993), from buying a home (still living in the same apartment I moved to right after college) and prevented me from starting a family (married, no children.)
And yet, I contribute to this economy professionally and through taxable income. So the government has benefited from my elevated earnings as well as from the skills and knowledge I developed in college, but I myself have seen little gains. Sometimes I feel like I am just treading water, without making any significant progress in advancing my situation.
9
Many small, private colleges are dying slowly, squeezed between the rising costs they are trying to manage, and a shrinking pool of students who are more price-sensitive.
Another unintended consequence of this plan is that it will drive many small colleges out of business. Whether this is good or bad is debatable, but the disruption will be profound, with even more students moving to subsidized State schools.
The rush by this year's Presidential candidates to give away free money - as much as possible, to as many as possible, with simple messaging, is another sign that our political system is completely dysfunctional.
Rome was thought to keep a restive population in check with free bread and circuses. We're getting promises of free tuition, paid for by some other people.
3
@William Murray giving away free money? Subsidizing a better future for our whole country is in fact a smart investment which will give society-wide returns, not "free money." The billionaire tax cut on the other hand - now that was free money to the rich courtesy of the rest of us. And jobs were not gotten nor were better wages - just smaller refund checks for all of us who work hard. How did you feel about that reverse Robin Hood scheme?
1
The foregoing comment does not dismiss the macro economic point that student debt is holding the economy back by crowding out family formation and home purchases. Something needs to be done about this.
HOWEVER, that said, these proposals seem like transparent pandering to younger voters, and grossly unfair to working class young people who could never have gotten into Harvard or Dartmouth, or into grad school somewhere, as well as to the previous cohort of debtors who paid their debts thru their own labors and sacrifices.
Worst of all, what does our society get in return for the debt forgiveness? We ought to be getting something in return, besides more families and home purchases- e.g. community service, relocation to areas underserved by professionals or social/human services, helping struggling local governments or community agencies, helping others less fortunate somehow. . .
Too much free lunch-ism here.
5
@Jeff G. I find your comment very unfortunate. Many working class kids go to Harvard and colleges of that ilk, and they borrow to do so. I know this personally. And an educated young workforce is absolutely necessary for a healthy society - that is why smart economies like Germany's subsidize their college students. The entire society benefits - and into the next generation. An educated population - not burdened by debt like a bunch of indentured servants - is a social good, period. The idea that the poor and working class ought to go do community service but children of oligarchs in this income-disparity-riddled country should not have to, is elitist.
8
"Unintended consequences"? Yes, that may happen. But it is vastly superior to the intended consequences of massive student debt - a generation of impoverished, debt-laden, and economically stifled young people.
16
Why do we need to erase the loans?
1. Put a temporary freeze on interest accrual for existing loans so people who are currently paying faithfully and only seeing their balances INCREASE have a chance to get ahead and can actually pay some principle down. The duration of the freeze could be dependent on the amount of the loan (people with higher loans get a longer freeze).
2. Subsidize all new loans. There's no reason a student needs to be accruing interest on their loans while they are in school.
3. Cap interest rates around 2-3% max. 8%+ is absurd.
4. Extend the grace period for repayment beyond 6 months to give recent grads more time to find a job before they are required to repay.
5. Cap schools in regards to how much they can raise tuition from year-to-year. Out of curiosity I looked up my in-state alma mater's current tuition - it has gone up more than $3k per year since I graduated only 6 years ago. At that rate, if I were to send my children to that school in 18 years, they will pay $50k more for their degree than I did.
As someone who DOES have student loans I would still only support loan forgiveness for families living near the poverty line. We don't have to erase loans of people who have a reasonable ability to pay them - just make it possible for them to actually pay them off.
16
I'd love to have my student debt canceled, but canceling student debt just enables the schools that charge too much for education to begin with. It does nothing to bring down costs.
It's the same with universal healthcare, or medicare for all, it's a great concept but not with the costs of healthcare being what they are.
8
Don't forget the other side benefits to the economy of relieving these people of excess debt. It means they can actually spend the money they earn rather than put it towards loans. This would probably be an extremely effective economic stimulant similar to infrastructure or low income tax rebates. It doesn't matter if it covers literally everything for those benefits, though the more the merrier.
4
I have debt for a master’s program REQUIRED by my profession, more loans to help one child get her bachelor’s degree, and more to come to assist the next child. My teaching degree doesn’t pay enough for me to afford to help them, but if I didn’t, no one would. I will paying my loans until my death.
I don’t think Sanders’ plan is practical. Is it a one-time thing? Will it wipe away the loans I have now but leave me with loans for my younger child? Will her older sister be free of that burden while she has to struggle?
Undergrad is less expensive than grad tuition for sure, but it’s still not affordable when you make $55,000 and have to pay for housing, food, transportation, etc. On a payment plan, I would send one of my paychecks to the college and the other would take care of my mortgage and the oil bill. That is after the aid—including loans—my youngest will receive. I couldn’t keep the lights on, put gas in the car, or get to work. (No public transportation where I live, and bus fare wouldn’t fit in that budget anyway.)
Someone tell me how Sanders’ plan would make that work.
1
@Upstate Teacher then again, getting a master's to stay in a profession that can't pay off the loan isn't much of a plan either. Not trying to be rude, but it is something to consider.
13
@Upstate Teacher I understand that grad school was required, but at what point do we as adults ahead of time assess what our career requires, what it will cost, and what income it will produce and work to minimize the debt load? I think it stinks that teachers have to get a Master's degree, but I also think it's fair that as adults we assess what it will cost vs. what it will return and accept the consequences.
5
Who will educate your children and grandchildren if all the teacher who are underpaid follow your reasoning. Maybe instead of making things free, we should think about how to attract and keep good teachers (better pay!) and reduce the cost of eduction I return for more funding.
2
A quick web search shows 15-year home mortgages available for 3.125% interest and car loans for 4.74%. Why is the maximum student loan rate mentioned in the article 8.5%? Why doesn't the US value education? Surely a well educated workforce is more important than home or car ownership. I suggest as a start to the student loan problem that student loans be limited to prime + 1: variable interest loans at 1% above the prime rate. If banks won't make the loans then the government should. Other assistance could be fashioned based on income levels, but the future of the country's economy and the social fabric should not be imperiled by punishing interest rates that nobody but the banks profit from. I completed ten years of university education with one loan of $1,500 because I worked thirty hours or more per week while studying. With the current high tuition and loan rates, that's not possible anymore. If people want to make bad decisions and take on high levels of debt because of college type and lifestyle choices, at least the burden of paying large amounts of interest won't be one of the results.
3
@Minnoka It still is possible, it just is many times not ideal. I attended Community College my first two years and paid cash while working full time. I finished my Bachelor's Degree working full time and attending an affordable institution. During the time I attended I paid as much as possible to it and continued to do so upon graduation and was debt free from school within a year. It's possible still but it involves making sacrifices to get there.
@Minnoka
Because an education doesn't guarantee repayment but if you reneg on a house they can just foreclose and sell it to recoup costs. Can't resell a liberal arts degree.
3
@Minnoka
Ignoring private for-profit loan originators...
Hypothetically, the interest rate is so high because the loan servicers have no collateral to collect from delinquent payers. The age of the borrower nullifies dynamic interest rates based on credit history.
In reality, the DoE is making a substantial profit on their student loans, i.e. leveraging a tax on education loan borrowers to fund other underfunded initiatives.
The plan would also cap interest rates at 1.88%.
The entire point of this proposal is that it is meant to be coupled with eliminating tuition at public universities.
Per Slate (in an article also criticizing the plan):
"Student debt forgiveness starts to look a whole lot more reasonable, however, if you make it part of a wider reform to higher education that eliminates tuition or at least makes school radically cheaper for tomorrow’s students. In that context loan relief becomes part of a big reset, in which the government admits that our college finance policy over the last several decades has been a mistake, and wipes the slate clean for yesterday’s borrowers while ensuring we don’t repeat this failed experiment in the future."
"There are other things to like about Sanders legislation. It would require states to cover the full cost of attending school, including things like housing and books, for low-income students to ensure that they could truly graduate debt-free. Once tuition is taken care of, it creates a matching grant program that could funnel more money to higher ed to pay for more faculty and academic support. It’s an ambitious vision. Its main fault may be that, when it comes to student debt, it’s not quite ambitious enough. Sanders is thinking about yesterday’s borrowers without thinking enough about tomorrow’s."
1
This has become a single issue vote for me. If Sanders or Warren is nominated. I will hold my nose and vote for Trump. The democrats are moving more and more towards socialism.
10
Why shouldn’t Americans have the advantages of citizens in every other first world nation on earth have?
No young person or senior citizen in any other first world nation has to worry about the cost of health care (I’m a senior and it’s my biggest worry). Nor do the young have to pay off high interest student loans for decades. My cousins in Europe graduated university and medical school—no debt. They are serving their communities and saving money for their first house.
Why shouldn’t our tax dollars be invested in the health and education of Americans—instead of trillions thrown at a bloated military industrial complex?
17
@Zejee Because none of the Politicians cut the funding for the current expenditures and only propose more and more costs to the tax payer while borrowing more and more to fund it. Show me a budget with the cuts first to work out the budget and demonstrate its success then get going on added expenses.
2
This is not true. Other nations pay for health care and college through sky-high taxes and by not spending on their military. We are Europe’s military—they know we will protect them if they are attacked. So they skimp on the military budget and let us spend more.
3
How is a one time loan forgiveness fair to college students who have paid off their debt and those students who will start college after the program ends? Why not come up with a program that either provides low-cost loans or subsidises the cost of tuition, instead?
Bernie and Warren seem to be trying to outdo each other in terms of how big, expensive programs that can only be paid for by increasing taxes on the middle class and making deep cuts to other programs. And neither one takes into account the fact that flipping the Senate is far from likely. It's all castles in the air, designed to get young people to vote for them.
9
@adm3 It's very explicitly not paid for by middle class taxes.
The proposal will include a 0.5% tax on stocks and a 0.1% tax on bonds, which the Sanders campaign says would pay for the estimated $2.2tn cost of the programme over the next decade.
Not using taxpayer money at all.
3
Surely you know that Medicare for All is less expensive than for profit health care, the most expensive health care in the world. Free community college education and vocational training would be paid for (Sanders plan) with a small tax on Wall Street transactions.
Free four year college education at a public college could be paid with a minuscule reduction in our bloated military industrial complex.
Or maybe we could stop starting trillion dollar wars. I don’t hear any complaints about the middle class paying for the next war (Or on-going wars).
3
So the plan does not apply transaction taxes to the pension funds, 401Ks and IRAs for those taxpayers you claim will not be touched?
The very people the give away progams affect probably do not vote. However "the base" votes and you might just be looking at four more years. I fail to see any overall traction with any of the Democratic candidates as they all seem to be niche candidates.
1
Most Americans can’t afford for profit health care. Most Americans can’t afford the cost of higher education.
As someone who (thankfully) graduated from a public college with no debt, but has watched many of my classmates struggle and limit their life and career choices because of loans, I'm a big fan of these plans. This article definitely brought up some important points that I hadn't considered, but I think it's incredibly important that these candidates are determined to try something, rather than continue to let it snowball. My grandfather paid for college in full by working summers at minimum wage, whereas my friends will be paying off debt well into middle age. That seems ludicrous to me. The policy mechanisms will be figured out, the way that they have been for every other new type of legislation. I think my peers appreciate that Warren and Sanders are thinking outside the box.
4
While this is a dramatic shift in its proposed form, it might be the shift needed to right-size overall educational costs long term. Free public tuition would have the immediate impact of freezing then lowering tuition levels at private colleges, too. Maybe not the tippy-top tier selective schools but most others as their value proposition erodes in the face of no-debt undergraduate degrees from public institutions. Educational cost is a bubble waiting to happen. Maybe this proposal is the long needed thing that rapidly turns the cost trajectory in education.
1
As someone who saw the ugly side of higher education while getting his PhD, I firmly oppose these kinds of free tuition plans. I don't oppose subsidizing education per se, but these ideas are so poorly implemented they will just force more and more of our national income into a broken system. I imagine it's like watching the modern US health care system emerge in post WWII.
I firmly believe higher education as it exists now is firmly divorced from reality. Universities educate like students like banks package and sell loans - once the student is out the door they could care less about the consequences.
We should think more seriously about alternative payment plans for colleges. Personally, I would make student loans dischargeable in bankruptcy and, additionally, with the large endowments universities have, they should finance the students themselves rather than have banks or the government issue loans. If you truly believe you're educating the next generation of leaders, then you should expect everyone you admit to be able to pay you back. It's a lot harder to give away fake degrees when you're the one holding the students IOU. Sometimes that means not admitting students. Not everyone should go to a liberal arts university. Some people should go to trade schools.
14
@Brian I completely agree. The money would be much better spent if we set up a trade school system similar to that in Europe. Also, community colleges have been depleted of funding, forcing students to attend for-profit colleges because wait lists are so long. We need more funding for community colleges. Also, the number of loans and grants available should be distributed proportionally for the fields most needed for the future.
5
My problem with student loan debt is that they allow a 17/18 year old student, me at one time, to borrow money so easily. At 18, of course I knew I had to pay it back, but I wish they would have been a bit more transparent with what the actual payments would've been after I left school. Like a "hey, if you borrow 8,000, you have to pay this much a month after you enter repayment" I think it would've made me think a little bit more about my school of choice, and a lot of others too.
I did go to a private school, but I don't regret it. I did student-faculty research and 3 internships while I was there, one leading to a great job that I love. I knew I had a full time position 7 months before I graduated, a luxury that not a lot of my other peers could say they had. I loved my college and am grateful for the direction it took me, even if it did come at a higher cost. I have loans to pay back that won't break me, but will still sting every month when I pay.
But I made my choice. I just don't think very many talk about how predatory the student loan process is. My parents didn't go to college, they couldn't help me pay. I had no one to talk about college choices or loans at 17. I just had the government saying "here, take this money and run." Guess I will just be driving my 20 year old car for a little while longer.
10
@Kaitlin Perhaps in the future you'll be more skeptical of the government offering 'help'. I've sure learned my lesson over the years.
@Kaitlin - If your parents couldn't help you pay, then you presumably got your own "independent student" loans. Aren't those loans only available to persons at least 24 years old? If you took loans from a private lender at the age of 18, then yes, you were selling your future self down a river.
All of the government-backed loan paperwork *does* indeed feature a statement that shows exactly how much the repayment--with interest over time--will be.
This longtime teacher is happy that your education paid off.
@RLS I'm sorry to hear that. At 18 I may have been a bit too naïve, but who isn't at least a little naïve at that age?
Just to clear up how this will be paid for, as it appears that nobody bothered to look up that rather important detail before rejecting the proposal:
Per the BBC:
The proposal will include a 0.5% tax on stocks and a 0.1% tax on bonds, which the Sanders campaign says would pay for the estimated $2.2tn cost of the programme over the next decade.
Not using taxpayer money at all.
Per Sen. Sanders:
"The American people bailed out Wall Street," he said as he outlined the plan on Capitol Hill. "Now it is time for Wall Street to come to the aid of the middle class of this country."
@David. But those are investments, not money taken out from doing a job.
@Eric W,
You wrote, "Not using taxpayer money at all.". I'm sure that if you think about that for even a moment you will realize that it's nonsense. In the end, it is natural people (ie; you and me) who pay *all* taxes. Moving the tax to stock market transactions doesn't change that in any way. It simply makes retired schoolteachers, nurses, and firemen the taxpayers. If the mumbo jumbo about high velocity trading is at issue, then *everyone* bears the cost of restricted capital markets - - - a tax on the entire nation. Sanders is a flim-flam man and has an act, not a plan.
4
@leftrightmiddle,
Yes, those and those investments fund the pensions of retired schoolteachers, nurses, and firemen. Those investments were built by those who worked and saved for a lifetime to be able to provide for themselves and their children. In the end, when you follow the money, you find that all taxes are paid by labor.
If they would just recalculate balances, taking out all the interest that was added in, they would find that many older people have already paid all or close to all of the original principal amount. Lack of interest would make payments easier for those new to student loans. Even 1% interest would be manageable. As Elizabeth Warren pointed out previously, it's a shame that the government is making money off of student loans. The government has an interest in its people being educated for different professions. The student is already taking a gamble that the education will pay off.
3
@Have loans FYI this plan would also cap interest rates at 1.88%.
There seems to be very little difference between Sanders and Trump when it comes to slogans.
T - Make America great again.
S - Make American stuff free again
12
This whole thing is so absurd. Just make all student loans zero interest or very low interest. Sheesh...anything else invites massive rage all around. I’m not paying for that kid’s college and grad school!
33
@Chris McClure When did you graduate college? Because if it is any time... ANY time before 1995 you have no idea what it is like. These kids that you wont pay for, are the ones that are paying for the social security you will collect and they will never see. They are the ones who were deceived into thinking a college degree would solve their problems, and it only created more problems. It was not this generation that crashed the stock market in 2008 because of poor housing management and money lending, it was not this generation that decided the government would let the universities increase tuition costs ten-fold while the cost of educating the students has hardly risen. These indebted students are the future of the nation you claim to be a member of. What is the point of patriotism if you cannot care for the future of the nation you claim to love? It is not about you, its about the future.
223
@Chris McClure "I’m not paying for that kid’s college and grad school!"
Unless you're a retiree, you're likely already paying for "that kid's" education from kindergarten through 12th grade, even if you don't have kids of your own. Considering it's all but impossible for non-college-grads to obtain high-paying jobs in modern-day America, why would you begrudge its youth the opportunity to earn a decent living -- all the more so since much of the taxes derived from those jobs will, as already noted, go directly towards paying your own Social Security and Medicare benefits?
4
@EB
They made decisions, its not the taxpayer's fault for their decisions. Who deceived them into taking these loans for college? The parents? Schools? It was the student's choice. If someone chose not to take loans - or bot go because of the financial cost - are you going to give these folks an lump sum of cash too? It's only fair. The social security argument is weak. I graduated before 1995 and I still will not see Social Security. These students are not indebted...they made choices.
6
Perhaps, the focus should be on loan forgiveness for public college/university schooling. Just as tuition in private schools (pre-college) are a personal responsibility and public schools are free. There should also be a cap on what public universities can pay administrators, invest in pseudo-professional sports programs etc.
2
May I ask why it is so difficult to simply give the bankruptcy court jurisdiction over student loans? This would resolve the question of the ability to repay, and remove the issues of morality. If this option is available to strip thousands of people from their pensions why can’t it resolve the question of whether and how fair repayment of a student loan should be?
15
How many people would qualify for bankruptcy? Repayment as a hardship is not a criterion for bankruptcy.
Be careful what you wish for. It is possible at this time to wipe out your student debt if you are over 62 or disabled, you just need to apply for it. However, when the debt is forgiven, the government has the right to add the amount forgiven as income for the following year and you will be charged accordingly. Can you imagine having to pay the taxes on thousands of dollars? If you have any assets they would, of course, be attached and foreclosed on for failure to pay taxes owed. It really should be more difficult to obtain student loans, maybe after the student has exhausted all other options as much as a good idea the loans seemed to be at the moment, the loans come back to bite you later.
1
Neither plan addresses the root causes: exploding administrative expenses and absurd amenities. The target for education reform should be the price of college, not the debt. The only way to bring costs back in line is to cut unnecessary administrative positions in higher ed and pull back on student amenities.
Classrooms and research don't cost that much money, unless it is cutting edge science research. Post-graduate degrees in the humanities, in particular, should be much lower.
Community colleges have figured this out. Why can't our four year institutions?
22
@Toby This really isn't a secret, but no university is going to unilaterally cut all those adminstrative positions, which in reality are things like freshman on-boarding, wellness programs, psychological services, state-of-the-art health facilities, etc. We provide them at our colleges because students won't come if we don't.
The only way to change that is either to stop telling students, "don't worry about the cost, just go wherever makes you happiest," and start telling our kids to make wiser financial based decisions (if our admissions drop due to costs, I guarantee we'll react) or to across the board limit spending on such things (but how do you do this when each public institution is run by the state--you've got to do this across 50 states at the same time to make it work). The problem remains the same as in all areas of the US--consumerism. We want more, more, more, who cares about the consequences?
2
@John Great points. The only way to drive the next generation to cost based decision making is to cut back on credit markets and availability. We have to relearn the utility of looking at the world through economic and political tradeoffs, instead of a system that tells us we can have it all, all the time.
Unfortunately, much like the reality that no university is going to make unilateral cuts, I'm not sure we live in an environment where a politician will acknowledge this necessity (even one as smart as Warren).
1
I can see why, with 19 competitors in the primaries, each candidate comes up with yet "free" appeal. In the spirit of 'you can't make this up', I will take a stab at predicting what the 20 democratic hopefuls will promise next:
a. Free rent.
b. Cash payments to kids who eat vegetables.
c. Pay off all outstanding home mortgages and car loans.
d. Free babysitting so that people who choose to have kids are required to make zero sacrifices, and can continue their careers and lifestyles as they wish.
e. Guaranteed promotions for all people under 40 every eleven months.
f. Immediate imprisonment for anyone who provides negative feedback to anyone's objectionable attitudes, behaviors, desires, wants, or demands.
g. New laws that make offensive speech a federal crime.
h. All recruitment efforts, by business, government, and sports teams will now be guided not by merit, but based on the applicants' ability to recite historical grievances unrelated to the job, and clearly articulated notions of entitlement.
All this can be done by reducing military spending to zero, banning most cars and trucks, declaring plastic as illegal, requiring veganism, outlawing Lululemon, and confiscating the money and assets of anyone making more than the national median.
Thank you, 20 candidates, for a triumphant return of Trump and Trumpistas, and ensuring permanent electoral wins for right wing thuggery. But for you, there was a chance for sanity (now no longer).
56
@Kalidan Thank you for your Hilarious and spot on satire.
10
All the Democrats need to do to beat Trump is to be somewhat reasonable. Only Biden is somewhat reasonable.
6
@Kalidan
You left out reparations.
Do we really have to outlaw Lululemon?
1
The authors, from a supposedly non-partisan, but actually Republican-leaning think tank employ the “lies, damned lies and statistics” and “politics of resentment” tactics to argue against relieving students of their education loan debts. Fifty five percent of loans may be for private college and graduate education, but those graduates can expect higher incomes than your average earner of a four year degree. And, by their logic, the GI bill, which juiced the post WEII conomy and was responsible for the largest economic expansion and movement of Americans into the middle class that this country has ever seen, should never have passed because earlier generations didn’t recieve such benefits. It isn’t hard to see that cancelling student loan debt could have a similar salutory effect on the economy and the finances of students from the declining middle class of today. Just as Republicans in the thirties and fourties fought against, and are still trying to destroy, anything that benefits middle America, so their think tanks now argue against any new programs that help anyone not already rich.
14
@Renee Margolin,
The GI Bill is still in place and even better than the deal I got as a Vietnam veteran: the current benefit never expires. Serve your country first, then your country will thank you with a full free ride in college. Our ability to understand that sequence is what has been lost between then and now. Today so many seem to think that those who have done nothing are entitled to everything that those who served have earned.
3
What about the bankruptcy exemption? Right now, student loans may not generally be discharged in bankruptcy. Could a change/modification of this be part of the solution?
Upshot column writers, perhaps you could address this?
9
No lender would provide a loan to a student because the borrower does not have income or collateral to assure repayment.
5
@Suburban Cowboy. Hi. I think your argument goes to the federal government guarantee of payment, which basically that the lender does not lose if the student debt is not repaid.
A debtor's ability to discharge student loan debt is a different question.
I believe one could discharge student loans in bankruptcy until about 1995, when Congress revised the bankruptcy law.
1
The Fed Government is the lender. The whole guarantee of payment deal ended with President Obama booting the banks from the process in 2010.
The USA has more than enough wealth to cancel all student debt and erect a truly free university system. No one will go to U. of Phoenix for a dubious credential if they can go to their high-level state university for free. Where was all this hand-wringing when the government spent trillions bailing out the Wall Street institutions that crashed the economy just over a decade ago?
11
Why did no bankers go to prison but Martha Stewart did?
@Philippe Egalité - Amen. It's also worth pointing out that the bailout money--roughly $700,000,000,000 just for round one--was raised *in a weekend*! There was no hand-wringing, just a quick sit-down around the conference table, and presto!, here's your money Wall Street!
And of course the grifters who gave us the crisis in the first place were then immediately set free to go back to doing 98% of the same things all over again. Cue the next implosion in ten, nine, eight, seven . . .
1
From a European perspective (where most education including at the graduate school level is basically free) this comment seems fuelled by reactionary impetus and backwards thinking. If it is not possible it is because the system is broken. The need for change is evident and better models clearly exist and are actually thick on the ground in many countries. Education is a human right and has to be free.
14
@Dr. Michael Becker,
You wrote, "...basically free." Nothing that involves human labor is free; the cost is simply shifted to others. My maternal grandparents and my father came to America because they liked the deal that America offers. So do I.
3
My wife and I worked extra, MUCH extra, in order to save for our children's college education. And they graduated with no debt. They also had to save 1/2 of their high school earnings, and work summers.
All told, we probably paid $100,000 to get them through college, about 20 years ago. With inflation that is even more.
Why should we have worked so hard, and our kids so hard, to get them through school and then end up pay for other people too?
If this policy is enacted, then it should be retroactive--all people who have paid for college expenses, parents and students, should have their expenses reimbursed. It's only fair.
As this article attests, most of the expenses that people are complaining about were foolish ones--private colleges, for-profit schools, and then expensive graduate programs. Our daughter did the Community College route, and now has a Ph.D. from a major university with NO debt.
This plan by Warren, Sanders, and others is nonsense. We're not paying for our own children's college expenses and then the expenses for other people who made foolish choices.
11
@Travelers What about the kids who made "foolish choices" that had no guidance, no parents lucky enough to save for them? If you're telling them "life ain't fair" maybe life also isn't fair for the parents who saved and put their kids through college?
1
@Travelers
20 years ago saving 1/2 your summer money would pay for college much easier.
10 years ago two of us worked full time, at better than minimum wage jobs ($8-$10/hr when minimum wage was $5.15/hr). One of us went to the community college, the other worked because we couldn't afford two of us in school. No parental help available. Guess what? Yep, we did what we were told was "right" and ended up with student loans. Too "rich" to qualify for grants, not enough time to study to qualify for scholarships (B's don't get as many options).
Your children are blessed you could help them. Be grateful that you allowed your children a future. Us? We are still finishing paying loans ( a job loss and returning to school for a better degree ( nursing instead of business) does that). A house? Saving for retirement? We laugh at those dreams. Instead, we pay interest on loans that are worse than credit card debt. Loans that at 20 we didn't understand the full impact because unlike auto loans, there was no truth in lending statement.
2
@Travelers I think you may fundamentally misunderstand the concept of Free Higher Education. You'd not have to spend that $100,000 on education, or for any other child's education, for that matter.
Of course wiping out student dept doesn't make "problems" disappear; problems like too-expense public and private education, but it certainly would help those drowning in debt. Better yet- perhaps doing away with the Reagan-era inability to discharge student debt in bankruptcy filings would go a long way in remedying bad credit ratings, inability to obtain credit; having veritable debt bounty-hunters chasing student debtors and parent/grandparent co-signers to their graves.
If our dear President can use other people's money then gleefully file bankruptcy- certainly bankruptcy access to wipe out student debt, should be available too.
7
You do not know how to read the numbers. Private schools such as Macalester College will offer much more financial aid, including loans, to students than a state school. Therefore, more students choose private schools. That is what raises the percentage.
Debt is an enormous psycho-emotional burden that affects all one's life decisions, where to work, where to live, even what career or profession to choose. It means fewer teachers, general practitioners and other necessary professions. It means not being able to afford to take entry-level positions that pay too little. A musician cannot get into a full-time orchestra position in the first round of auditions. They must get experience in lower-tier orchestras, many of which are part-time, while practicing constantly to continue improving. It's similar for many professions. And not everyone has enormous energy, or the ability to not enjoy life.
The first step is to stop collecting interest on student loans. The second is to severely limit the fees of, or to probably eliminate collection agencies altogether. The third step is to reduce or eliminate debt for all those going into helping professions and the arts, like medicine, education, literature, performing, all things our society and culture desperately need. If one's income rises above a certain level with success, then repayment could kick in. The fourth is to make certain debt is eliminated with death or disability or chronic illness. Many people don't know it can be.
10
College is free in France, Germany, Norway, Finland, and Sweden, all of them successful with that. France has done that for over 200 years, since Napoleon rebuilt the system.
I went to college near for free in the 1970's. I made enough from summer and part time work to leave college with savings and some stock market holdings.
It is only recently that the US has shifted the cost of higher education onto students. It has been a massive shift. It has been done without reasoned discussion.
Now the idea of shifting it back to what it was for me is "revolutionary." Only Bernie dare say it.
What garbage. We've let Republican-think set the frame of discussion. What they did was wrong, and cruel, and has damaged the US population and economy. It has crippled demand, and the future of many of our most productive citizens.
This is stupid. Fixing it is a return to sanity, not revolution.
20
My sister's oldest son racked up $75k in debt and joined the army after college so he could get rid of his debt. He's currently serving in his 2nd tour in Afghanistan. These proposals are an insult to those worked hard to pay back their debt, and to those who literally have put their lives on the line to pay their debts.
14
@RP Smith
Our society is an insult to decency if we are requiring young adults to kill other humans for the privilege of a debt-free education. I'm so sorry your son has to do that to get an education.
2
@RP Smith - Yes, effectively a debt draft! That's a perfect solution here in Lone Superpower USA! Email DeVos; she should get in on this, perhaps with her brother.
1
@RP Smith I actually don't agree with the Sanders proposal. But to say that a problem shouldn't be fixed because previous people had the problem is ridiculous- nothing would ever be improved...
1
Perhaps by restructuring our k through 12 system, we could prepare students to graduate from high school at 16, at which point students would take exams to help them plan the next step: college, technical school, trade school, etc. employers could create tech/trade programs and hire students based upon their exam scores. We are prolonging adolescence with our current system. Young people might benefit from working for a few years (ages 16 to 18) and then deciding whether they are ready (emotionally, intellectually, financially) for college. The money that we save from graduating students at 16 could be invested in improving elementary and secondary education programs and in supporting our public tech/trade schools, colleges and universities, which just might lower tuition.
3
Seems the article is written by Mitch McConnell or one of his flunkies.
Student Debt write off can’t be done because it’s to complicated, therefore let’s us just ignore it, we can hope they just go away.
I’m no Krugman but his piece about Tennessee, compared to Kentucky.
It appear Cruel Lawmakers, could partially fix Tennessee Healthcare problems at the stroke of a Pen.
Tennessee lawmakers take the view that someone has to pay, they cannot figure out efficiency, pays the Lower bills.
The Bill simply goes down it actually saves money, that never occurs to kitchen sink cash flow economists.
The court case in New York about Medallions, is essentially the same argument doesn’t matter if it’s milk, steel or taxis, quotas concentrate trade into fewer hands, ever fewer lenders finance the charge into eventually unsustainable pricing.
Some shell Corporation with no assets and a bunch of immigrants go broke, who cares.
Prices have to rise to pay for the inefficient management by lawmakers Customers find alternatives. In New York Uber and Lyft driver work double the hrs for less money can’t afford healthcare and their kids take out unsustainable student loans driving up the cost of Education.
Doctors need to earn $1 a year.
It’s Unsustainable so Trump gets elected as someone hopefully stupid enough, to break a even stupider unsustainable government largesse.
US Foreign Debt largely feeds this stupidity at good rates of return, the investors don’t care about you.
2
The only real solution to student debt accumulation is simply to close down all student loan programs. That would force colleges to offer programs at a price people can actually pay. It would certainly require to cut off a lot of useless slack, such as the overpaid college administrators and sport programs, etc. Private colleges would have to rely on their endowment, strive for more public funding, sell off their non academic ventures and properties or simply have to go out of business. It would also democratize college access, since colleges could not afford anymore to micromanage the composition of the student body. But all that would be real reform, something which people don’t do in this country.
10
Linear solution.....no carte blanche....public schools ONLY (2 year or 4 year)..time limit on successful degree completion (3/6 years)...NO $$ for private schools or Post Grad...
2
Sometimes you just make a bad business decision.
Why not just amend the law and allow student debt to be forgiven in bankruptcy?
Why is that so difficult
5
I sacrificed an awful lot of discretionary income (which I'm so lucky to have!) to pay back my daughter's loans. She can now practice as a DPT without being in debt (at 8%) to the tune of half her take-home pay for the rest of her working life.
Yet I wouldn't begrudge anyone else receiving loan forgiveness. How would that "penalize" me? It may not seem fair but it benefits me and all of us in the long run, by educating more people, the people who will be running the show when I'm old and retired.
In fact, nothing is fair. My student loans were at a 2% rate. Tuition at my private school amounted to less than 10% of my dad's middle-class income. Rich folks benefit from enormous tax breaks that aren't available to me; legacy kids admitted to universities my kids didn't have a crack at; WWII soldiers having the GI bill while today's vets suffer; hardworking people denied full-time benefits due to modern cost-saving hiring practices...I say, if we can turn anything around and benefit the future, let's stand up and do it! Let's make America great again - a path towards the fairness we were raised to believe this country believed in.
343
Quality comment, Anglican!
18
@Anglican Well said, your empathy and selflessness is greatly appreciated!
20
@Anglican What about the student loans in the future? If the government pays off or cancels all the student debt once, do you think anyone will bother to pay off their student loan anymore, or just wait for the next government bailout? Alleviating student debt is important, but the amount of alleviation has to consider the total amount owed, the debtor's income level and the past behavior of payment, so we don't encourage irresponsible loans by wiping everyone's plate clean for free. It's true that nothing is fair, but we should still strive for that with more thought on everyone's behalf, be it a past/current student, a future student or a tax-paying citizen.
17
This article states the obvious. Proposing to cancel all student debt appeals in a populist sort of way, but in reality it is a dumb and unworkable idea. In a certain sense it would be a huge tax-payer gift to private universities which are already incredibly well off. They received much of that money, and forgiving the debt would encourage future students to indebt themselves to attend these overpriced institutions. What is really needed is lower tuition costs so students don't need to indebt themselves so much in the first place. And government paid financial aid should be restricted to public universities only.
7
Yes the private schools will gladly keep extorting whether the money comes from student loans or taxpayer money.
College athletes are indentured servants
This is one of the poorest efforts I've seen from the Upshot team. Even a cursory reading reveals two (probably unintentional) distortions and one major missed inference.
1. You can't just combine the 55% of loans going to private (vs. public) colleges and the 40% used toward graduate school, because (a) many graduate programs are run by public colleges and (b) the loans to private schools include those for graduate programs.
2. It is not accurate to state that graduate school is expensive. Yes, some professional programs are expensive (law and medicine stand out). But tuition for most master's degree programs (such as those in education, mental health fields, and so forth) is very close to undergraduate levels. And most Ph.D. programs at real research universities are essentially "free," in that most students are fully funded by assistantships, fellowships, etc.
3. Once you make public colleges free, many/most private colleges will be forced to close. Not just the handful of predatory for-profit ones, but the non-profit ones that do a better job of working with less-well-off, less-sophisticated students and do all they can to be affordable. This is a large economic sector to wipe out. (Please don't reply that Harvard is rich. I'm not talking about the top 1% or even 10% of schools here.)
Come on. The Upshot is capable of better than this.
4
@Stephen J -
Yes, distortions:
You're making no $$ provision for differences in geography or other factors that affect costs of attendance. MA and PhD programs are not "essentially" free. Yes, there is a small stipend for teaching--and, perhaps, a tuition waiver. But if you go to school in an expensive city, you will not be able to cover rent, food, and transportation on that 12K and still stay on top of rigorous coursework, exams, research and presentation, and teaching responsibilities. Loans and credit card charges fill these gaps for many graduate students, hence much of the 1.6T.
Also, I'm not sure where you're getting your info re: the "close" cost of undergrad to grad tuition in fields like education (my field). At the U of WA, my state's flagship research school, quarterly in-state tuition in education is 3700 for undergrads and 6000 for grad. I believe this is fairly representative of state universities.
(BTW: for 2019 UW estimates that 120K is the total price tag for a four-year degree for in-state students who finish on time. Even if family resources cover half, where's that other 60K coming from?)
And why would private colleges be forced to close? Would Yale and Dartmouth really not continue attracting wealthy status-seekers? Will all the Range Rover dealerships have to close too?
Finally, we have far more than a "handful" of predatory colleges, hence the many lawsuits and subsequent closures in recent years. Good riddance to those rackets.
@Scottb
First of all, when I said don't cite Harvard I meant it as an example of a class of schools, so please ignore Yale, Dartmouth, etc,. as well. They are not at all typical of the thousands of colleges in this country.
As for graduate tuition, I happen to be a professor in Connecticut, and at most of the private, non-profit schools in the state tuition for most graduate programs is comparable to what undergraduates pay. That seems to be true in neighboring states as well. The exceptions are programs preparing people for potentially lucrative professions.
I agree that graduate students in serious doctoral programs ought to be better funded than they are. Of course that can't include programs that are designed for working adults. The idea is to support full-time scholars and scientists.
1
@Scottb
University of Washington tuition:
In-State
undergraduate $11,207
graduate $16,590
Out-of-State
undergraduate $36,588
graduate 33,363
Yes the discounted (taxpayer funded) in-state tuition is higher for graduate students in your professional field. Point taken. No, the tuition for those paying full price is not.
This is the best piece of journalism that I've read in a very long time: concise, comprehensive, objective, all those good things that are so rare in the media today. Thank you.
4
I will be taking advantage of my degrees, not others. I made decisions about what degrees to get based on how they would benefit myself, not how they would benefit everyone else. Thus, I do not think it is fair for others to pay for my degrees. I believe that my debt is mine to deal with. It is my investment in myself. Tough luck if you took out a lot of debt for a useless degree. You bet on yourself and lost. Personal responsibility is what made America so great—let’s not ruin our country by letting everyone know that actions do not have consequences.
11
@Jake
Right.
It would be awful to pardon the Iraq War (Obama refused to investigate the Bush team's conflicts of interest), mortgage crisis (who went to jail? the execs responsible still managed to walk away with gold parachutes), offshore stock piling of profits (2 repatriation 'tax holidays' and counting). Hate to break it to you, but actions only have consequences for the lower classes. That ship has sailed.
1
@Jake - What sanctimonious nonsense. "You bet on yourself and lost," says Jake to the aspiring future social workers and teachers of America.
(After all, they just have "useless" degrees, unlike the selfless masters of the universe who do *really* important stuff like skim a bit off the top of a million computer-generated currency trades every second.)
Meanwhile, every slick "entrepreneur"--perhaps even the ones who were bravely "disrupting" education a few years ago with their innovative "market-based models"--can walk away from his failed "bets" with nary a thought for the money that will not get paid back. What about his personal responsibility? Why isn't his debt "his to deal with"?
Why do NYT articles about the student debt crisis elicit (like clockwork) so much smug denigration and blithe sadism in the comments? And where was all this outrage when Wall Street had its hand out?
1
I'm really amused by all the people sitting back on their high horses about why student debt shouldn't be forgiven because they had to walk 16 miles to school in the snow, wearing only cardboard for shoes and suffered through it. Why would our society, or what's left of it, support having shoes for those who follow? Why would we give those people boots, for free? So my own personal tale: I earned what's now called one of the STEM degrees. After 35 years my entire career was exported to China. So I retrained myself. Went to medical school. The week I was supposed to start my savings was wiped out by the Wall Street collapse. So I borrowed. I earned a medical degree, became licensed. But, I was *too old* to get a residency. So I cannot get employed and anyone who knows the medical system which is now euphemistically called "health care", does not support individual practices. The reimbursement rate from insurance is less than what it costs to run even a stripped down practice - basically a practice out of a medical equipment bag. Rent, insurances, lights, supplies, the lady at the front desk. The ridiculously expensive electronic records system we are required to use. All that stuff you never think about. So I die in debt. Come on high horse people. Get a clue!
12
@Doctor X
Im an MD here. Came out with lots of crushing high interest debt in the late 1980's Some HEAL loans as high as 17% Paid it all off. Financed a private practice which is now in debt after all of the above you have stated. Financed my kids 3 education undergrad fully. My daughter worked hard to get into a fully funded MD phd program which will take her 8 years making 20G a year after residency she will be in her mid 30s but after living below poverty level at least she will have no debt. The system is indeed broken but the ramifications of just simply forgiving student loans will not fix it.
2
I dare say the 1980s and 2010s are entirely different universes. My engineering degree was paid off in no time in the 80s. Apples vs. tomatoes but thanks for your contribution.
College graduation has become what high school graduation was 20 or 30 years ago. Most jobs do not require the skills of a college degree or a graduate degree. Employers prefer this because it means that they do not have to invest anything in employees with respect to training. They hire and fire when the person they hired might need some training.
If we provided high quality apprenticeships for students while they are in high school fewer of them would go onto college. If our country truly valued its citizens as human beings and workers we would have better job retraining programs, and yes, unions to prevent the sort of idiocy that many large corporations pull with employees or to avoid hiring full time employees.
Then we can go onto pay. Lots of entry level jobs are asking for skills that most entry level people won't have for at least 2-3 years. How is that an entry level position? How does being forced to have a master's degree help workforce productivity? And why are so few of the instructors at the college level trained to teach?
This is about more than money. It's about the educational industry which is, at the present time, milking students for all it can. If the colleges focused on education and left out the sports the expense would be far less.
6/25/2019 12:11pm
139
@hen3ry
I notice Joe Sestak, the newest entrant to the presidential race, proposes a "national commitment to 'Training for a Lifetime,'" including a national apprenticeship program.
He claims, in his campaign announcement, that we spend "close to nothing on labor training--less than all other developed countries."
7
Yes!
2
@hen3ry
You say some jobs do not really require a college degree, but the employer demands a college degree so they don't have to train the employee. What gives? Apparently the students learn something in college that helps them:
1. learn the job duties faster and better
2. be more adaptive and able to deal with people
Police officers with college degrees are better at preventing violence.
We need other training programs, yes, but do not devalue the need for more people in the workforce with college degrees. The work demands today are different, and it makes sense there is a need for more preparation.
However, it is true that corporations are trying to get universities to train students for the jobs they have today, so they don't have to pay for training. The role of universities is to educate students for a lifetime, not for an immediate job that may be obsolete in 10 years.
Better job security, benefits, and decent wages for all should be expected, agree completely. But some jobs do require a master's degree, the same way you wouldn't want to go to a doctor who only has a BA. And universities have been working now for a while to better train their faculty as teachers. What you haven't addressed though is how they have a lot more contingent faculty people paid per class, very low wages, some times teaching at several different institutions and without benefits of job security. Do you want to improve teaching? Address that.
2
I understand the bitterness of the frugal and the savers here because I’m one of them. I paid off 40k in loans and paid cash for my daughters college, even though at the start I was an impoverished single mother on welfare. Today I’m barely middle class. Please do means test the distribution of loan forgiveness. But know that relieving low and mid-income earners from crushing debt will spark a spending spree aimed directly at pent up demand - which is EXACTLY what this country needs.
4
I agree with your assessment that the Sanders plan is irresponsible and unworkable, but it seems to me that Warren’s plan largely addresses the issues you raise. This is consistent with her more thoughtful approach. If you still find fault with her plan, this should be discussed separately.
5
It's so bazaar to see so many people angry because other people would benefit from loan forgiveness. It is straight up selfish. I wouldn't feel "penalized" if healthcare suddenly becomes free after I had to pay for my surguries over the years. Being so self centered is pretty gross
6
@J
J - loan forgiveness for others won't be free. We will use tax money to pay for it. And this tax money comes from the rest of us.
If you'd like to adopt someone to pay off their student debt, go ahead. But don't use my money.
7
@Citizen You're incorrect. Per the BBC:
The proposal will include a 0.5% tax on stocks and a 0.1% tax on bonds, which the Sanders campaign says would pay for the estimated $2.2tn cost of the programme over the next decade.
Not using your money at all. Per Sen. Sanders:
"The American people bailed out Wall Street," he said as he outlined the plan on Capitol Hill. "Now it is time for Wall Street to come to the aid of the middle class of this country."
Do your homework before rejecting something based on a false premise.
2
@Citizen - The Sanders plan is funded by what is effectively a tax on Wall Street transactions. Unless you own a brokerage, nobody is using "your" money.
(My lawyer friends read closely enough to catch details like this one.)
The photograph of the man carrying the life size Bernie cutout is wonderful on so many levels. The best part of the article for me.
There’s a real lack of compassion in some of these comments. No, not everyone suffering under the weight of student debt was a lazy middle-class partier who majored in basketweaving and made poor choices. In that number are also single mothers, first-generation college students, and many others who never could have attended school otherwise. So you got a job after graduation and paid your loan down in two years? Good for you! But consider yourself fortunate that you got a job with an income that could allow you to do that. So you scrimped and saved for your kids’ education so that they wouldn’t have to borrow. Excellent! But feel grateful that you’re in the small minority of Americans who are able to save anything at all.
178
@John Unfortunately, America no longer has a social safety net. Many of us underfunded our own retirement savings to pay off our student loan debt faster. Who is going to champion a program to bail us out in a decade or two? Or is that a privilege that only the young enjoy?
24
@John I do consider myself very fortunate. I was part of the last group of students to graduate from college with no debt. My parents were able to pay for my entire college education for a few reasons. The biggest was that I went to a SUNY school when it was affordable. Now it's not unless you do take a loan or five out.
If education is that important this country can well afford to do a better job. If it's not or debt collection is more important we'll continue to see lots of students graduating with lots of debt.
12
@John
Many commenters here did not even read the article. They simply offered simple, often draconian, solutions to a complex problem. I think this is a reflexive response to the fact that that the wholesale cancelling of student loans is an implausible solution most peoples minds.
7
Thank goodness - finally a bit of reality on this topic from the NYT!
These proposals are ridiculous. My wife and I each graduated from law school with over $100,000 in student loan debt. But we had a plan. We took out the debt to attend a top-quality school; we took high-paying jobs in a big city; we lived below our means for several years; and we paid off the debt in 3 years.
Had I known that Sanders would pay off my debt for me, I would have made different decisions - I would have made only minimum payments (or none at all); I would have spent my money on other things; and I would be laughing at the idiots who made responsible decisions and either avoided student debt in the first place or paid it off quickly. What chumps!
And why stop at student debt? Millions of people have credit card debt; pay-day lender debt; auto debt. And I would guess that many of these people tend to be poorer than those with student loan debt, given that many of the poor qualify for college grants and need-based scholarship.
Personally, I think that Sanders and Warren are competing to try to buy votes.
29
@Citizen - And votes they shall get--in droves, given the sheer size of the affected debtor population.
@Citizen
Credit card balances can be discharged in bankrupty. Student loans no longer can. In 2005, the change in the Bankruptcy Code even took away the ability to get rid of private student loans (loans not guaranteed by government or from nonprofit). Interest rates were also higher in the 1990s and early 2000s. The poor also had to take out student loans even if they received Pell grants and some other need-based help.
In these times of reparations and retribution, I want my share in this new-found beneficence. I was forced to pay back my college loans backed by a threat of the garnishment of my wages as I was trying to support my family. I want something for me too!
4
One of the major issues regarding all of this is the incredibly high cost of so many private colleges and universities. One solution to this would be that no government sponsored student loan could be made to any student attending any college or university with tuition cost above $20,000 per year.
3
Silliest idea ever from the socialists.
You should not be taking out a $100k loan to get a liberal arts bachelors or masters degree. It’s very simple.
10
@Jay - You realize that mathematics is one of the liberal arts, right? And that graduate degree holders in mathematics often do things like make gobs of money in tech and finance, right? Gobs of money that would dwarf that 100K?
I bet any socialist with a library card knows the difference between the liberal arts and the humanities (it's likely the latter that you meant to denigrate).
Here's an idea from this humanities-educated socialist: make higher education broadly accessible and affordable so as to produce a better educated and more politically competent populace. The ROI will be substantial and long overdue.
Unintended consequences? It has so many but at the core is the fact that this path separates choice from accountability.
Truly this is a poor use of scarce education resources and a curious area of debate. These monies would see a significantly better return if it were focused on the first three years of elementary school, kindergarten and earlier.
Maybe it is not such an odd thing to focus on but a cynical political appeal that panders to a segment of voters. Likerly the case until we lower the voting age to five.
2
When are we going to read about how to rein in the runaway costs of higher education and medical care, both of which have vastly outstripped inflation in recent decades, rather than debate about who should write the checks?
8
The way to rein in college costs is to not give everyone guaranteed loans for any degree they want.
4
As soon as the government takes over college payments and augments the cost to the taxpayer we will assuredly see the costs of college rise no lower. Especially when the academics (who are already insular) deicide to further bloat the system with an ever growing infrastructure and shield themselves with tenure. Then they will suggest that everyone should go to college... even when the student is studying a subject that is not a marketable. The goal will not be to educated the youth for preparations to enter the workforce but to become a place to get more students into the system regardless the subject of study to increase revenue for the institutions.
2
Will forgiven debt still be taxable? While no
longer owing student loan will help many, they may be surprised to realize that the amount is considered income and taxes will be due on the full amount the following year.
5
@Lawyermom Yes it is taxable.
I have several friends whose college education was paid for by the military in exchange for some years of military service. One of them had his way paid through medical school, one received a Ph.D. in computer science funded by the Air Force, and one received an MBA via the Army. All of them agreed to commit to several years of military service in exchange. Isn't ROTC still available on most campuses with tuition funding as a benefit?
Why aren't young people considering military scholarships?
9
because young people would prefer to not get shot at to afford their tuition.
source: am young person, would prefer not to get shot at.
5
@maxitos
Join the Air Force or the Navy. You can serve your country without getting shot at. Btw, relatively few soldiers are actually in harm's way.
5
@Phil
The reason many young people don't consider military scholarships is that they don't want to be part of an enterprise that killed, for example, more than 150,000 innocent civilians in Iraq.
Unfortunately our military has overthrown democratically elected governments, tortured its suspected enemies, and violated international laws.
That's the price we would have to pay in exchange for a college education through the military.
I meet lots of people who got their education through the military. I respect their decision (particularly those in medicine). I think you can respect ours.
4
Oh, but it does make problems disappear. When my student debt was (eventually) canceled, a burden was lifted off my back. The one good thing Napoleon did was cancel debt.
2
I'd also like to note that about the same amount of money has now been pledged in the Trump corporate tax cuts, which we now know have gone almost exclusively to stock buybacks, artificially inflating the markets.
10
How many of these loans were taken out by uninformed students going to for-profit 'colleges' ?
The college loan industry has been shown to be a scam in far too many of these cases where people are taking out loans to go to a school they are unqualified for, schools that do nothing to prepare them for any career, schools they do not graduate.
Even 'worthwhile' colleges have raised tuition at a rate far faster than inflation because students have been taking out loans that they are unable to repay.
8
@cynicalskeptic this same logic can be applied to health care in America. It's as if these entities think that the average person won't pay attention to the cost and they were right up to a point.
3
Student loans that cannot be discharged via bankruptcy was yet ANOTHER gift to the banksters -- whom all presidents since Clinton have been more than HAPPY to support... esp. if they are big banksters. (Obama wiped out many a small bank in favor the big guys.)
Why not just allow the student loans to be treated like all loans -- thus dischargeable via bankruptcy and also make it possible to get low interest rates.
Of course, if things are too simple there will be less income inequality after all lawyers, financial advisors and Wall Street geniuses have to be expensive.. (and raising savings rates is NOT AN OPTION).
I have no idea what arcane laws govern what. (There need to be free online law school courses-- and people need access to Nexux/Lexus databases in a country with case law.)
There need to be excellent OPEN online courses in every college subject from Lesbians in the Classical World to Advanced Quantum Mechanics... with clear lectures and pdfs that can be uploaded and read. Those who chose to be educated can be educated. (Education should NOT stop after 16 or even 20 years-- one has to keep on learning.. Granted there's overload -- another issue.) Cheap yup. Steps on the toes of many an establishment, yup. Non-elitist, yup. But a sane idea... and common sense sure is in short supply only matched in scarcity by compassion.
7
Bankers won’t lend money to unemployed 18 year olds with no income and no collateral. The loan system will dry up.
1
At least our huge college debt has become a political issue for 2020. That's some progress.
Compare and contrast:
See Money.CNN.com:
“New York offers free college tuition. So do these countries” April 10, 2017
“Is New York taking a page from Europe's education playbook?
Starting this fall, undergraduate students who attend a two or four-year public college will be eligible for free tuition if their families earn no more than $100,000 a year. Tens of thousands of students are set to benefit.
No other U.S. state offers the same deal. But in Europe, some countries have been offering similar benefits for years.”
The article lists “Germany, France, Sweden, Denmark, Norway, Finland, Czech.”
So any response to Democratic proposals on our super high tuition debt has to compare/contrast the reality on the ground abroad in many countries.
Taxes? Do their populations march in the streets to change to a high tuition USA type system?
Same with health care systems abroad. Do citizens pressure their parliaments to change to high profit USA health care?
Also Business Insider: “5 people from around the world share what it's like to get free college education. Pros and cons.
8
@Meredith
It's great that NYS will offer free tuition to poor and middle class students but tuition is only a small part of attending SUNY - for example, SUNY Binghamton lists the cost of attending (in state) at $27,000 per year with tuition only being $7000 - the students will still have to come up with $20000 per year - barely affordable for someone who's parents make $100K per year but impossible for a family that makes $30K per year or a student without family support.
4
@Meredith
March in the streets? Just the opposite.
A PhD from Germany told me that his education was free. As the NYT reported, the German universities started to charge a "small" fee (which is the way it started in CCNY). He said, "We were marching in the streets" to protest. He said, he couldn't understand why American students didn't do the same thing.
That's one reason why European students get free education, and American students are burdened with lifetime debt: European students will march in the streets to demand their rights.
2
@Al
The$27000 includes room and board at their residences. The fees are $3026, something that can easily be covered by working a minimum wage summer job.
https://www.binghamton.edu/admissions/cost/index.html
In-state poor students already have a place to live, and would have incurred living costs even if they did not choose to attend college.
If all student debt is forgiven then what’s to prevent “students” from living in a permanent state of “Academia”? They could coast through life “studying” underwater basket weaving, living on grants. This is an absurd and grossly irresponsible proposal.
13
@Jon - 20 U.S. states already offer free community college tuition, and those programs can give us a glimpse of how a broader national program might operate.
For everybody who's worried about permanent studenthood and a lifetime of apparent grifting from the honest hardworking folk:
The existing programs have requirements for maintaining a GPA, maintaining state residency after graduation, working in particular fields or communities, observing a time-to-degree limit, etc. There are plenty of strings attached.
There is no reason to believe a national program would be the kind of dystopian free-for-all bacchanal that the more hysterical among you are invoking.
Student debt is a problem entirely of their own making. You don't need to go to a private school, period. If you can't afford it, don't go. Go to a local college or go work for a few years instead. The insanity of flakes like Warren and Sanders and their 'everything should be free, man' hippy stupidity is exactly that, insane and stupid.
32
Tie tuition payment and loan payment to graduate wages, with a lifetime cap on how many years the student must pay in. Universities will then to learn to slash tuition when payments don’t meet costs.
Also, make a portion of those payments the responsibility of the employer. Employers may stop demanding inflated educational credentials they actually have to pay for, in addition to actually doing training on what their employees actually do.
4
I can understand the desire to relieve students of crushing debt loads, but I have one question. What about those of us who scrimped and saved and put money aside in order to pay for our children’s college expenses? Do we get tax credits? Do we get any benefits at all?
I am reminded of the tale of the grasshopper and the ant. The ant worked all summer, putting away food for the winter. The grasshopper did not, and when winter came he went to the ant for assistance. I am not saying that those who took out student loans are grasshoppers. But suppose their parents chose to spend money on non-essentials, leaving their children to cover their own expenses. Should those families now be better off than those of us who chose to sacrifice our own needs for our children’s? Are you now telling me that I made the wrong choices in life?
Perhaps I sound selfish. After all, I was able to save enough to allow my children to graduate free of debt. But I must admit that I do feel somewhat like an ant at times.
28
@John Hasen Not much to add to your post John, except that I agree with you 100%. The same thought has crossed my mind since Sanders starting trying to buy votes with this plan of his. Also, for many of those students whose loans would be forgiven, a good part of such loans were for extra curricular activities that had nothing to do with going to school. Should I then be help responsible to vacations taken and cars bought by irresponsible people whose votes Sanders is now craving?
11
@John Hasen
If you like parables, I am reminded of The Parable of the Workers in the Vineyard (Matthew 20:1-16)
The reason you scrimped and saved in order to pay for your children's college is that you allowed your politicians -- Democrats and Republicans -- to abandon the free city and state universities where people in Bernie Sanders' generation got their education.
Why didn't you demand that your taxes go to pay for education, rather than the military and prisons?
Yes, if Bernie Sanders' plans go through, this generation is going to get a free education. That's because they demanded it.
If you wanted free government-supported education, you should have asked for it.
3
if either free-tuition plan was passed and I were in charge of a state university -- or a state legislator in charge of school funding -- I would double the tuition. That would shift the funding burden from the state to the federal government, since the feds would pick up any cost students can't afford.
8
I see many of my fellow millennials talking about how these plans would be boons to the economy. They would not. The money has already been spent. It has been spent on construction, professors, and growth in the areas around these Universities, hungry for the cash the student loans have been injecting into these economies. It must be paid back, and not by those of us who actually work hard and are currently paying most of the taxes. If you have an expensive degree and cannot find work, that’s your problem.
7
Of course there is the huge unintended consequence - where is the fairness for the parents and students who chose to save and sacrifice instead of borrowing. Like the parents who did not take a vacation for years drove their old clunkers, and saved for college instead of their retirement. Or the student who worked a full time job while going to college so as not to have to borrow. How do we not penalize good behavior?
34
@John Campbell
We worked hard and saved to pay for our children's college. Having incurred debt ourselves, we started saving for our children's college before they were born and before our own loans had been paid off.
We delayed having children until we felt financially secure and ended up paying full freight without any aid as our children went to college during our peak earning years.
Frankly, our own retirement savings suffered as a result.
Nobody talks of compensating us for our sacrifices.
15
@cynicalskeptic
Yes my parents sacrificed a lot to pay the $56 (Yes 56 dollars) a year that CCNY cost in 1966.
Today 4 years at a SUNY will cost over $100K - impossible for a family making $50K and living in NYC to save.
4
Yes. But. We have to start somewhere. Community colleges and public universities. To support a family, you need two bread winners now, and at least one needs to be a college graduate with no student debt. We are on a downwards slide now. Let’s turn it around.
4
The debt is a symptom of the actual problem, which is the unchecked cost of higher education. That symptom has gotten so bad, it has become its own disease.
I know this because I am currently in a career transition to a field in the "holy grail" of STEM at a public university and I am doing so without taking on any debt (at least trying to). I have no idea if my investment will pay off, so the risk and cost is entirely mine. My per unit cost has increased 400% since I first graduated in the 00's.
The cost of education should be indexed to inflation to what it was in the last 50 years for schools that receive government grants and students responsible to cover that cost (by working, scholarships, loans). College should cost something, but it shouldn't be a lifetime of debt. Think of the economic drain when millions have checks going to service debt instead of buying homes or saving for retirement.
It's ridiculous that as the costs continue to rise, Universities rely more and more on underpaid, overworked adjuncts and teaching assistants. We are paying more and getting less. Given that employers refuse to provide real on-the-job training, those hoping to have a stable career are held hostage. Enough is enough. We keep hearing and saying that the US needs a more educated workforce, but we sure do not act like it. As we fall behind, the rest of the world is paying for their students to come here and study in Universities our own citizens cannot afford.
35
@CB as someone who started out life in biological research after graduating with a BS in Biology and minor in Chemistry I can tell you this: be prepared to start all over again at the bottom of the career ladder. I know because I had to switch to IT after 18 years in research. Why? I was too experienced and no employer wanted to pay me for my experience. I was 38 at the time.
Now I'm 60 and, once again no one wants to pay for experience. My point is this: I'm glad you are trying to avoid the debt trap. I avoided it because NY State did have a half way decent job retraining program in the late 90s. But there are two things none of us can avoid: getting older and getting more experienced. Employers are lying when they say that they cannot find experienced people. They don't want to pay experienced people. They don't want to invest in anyone. Therefore the only people that can succeed in the rat race are those born wealthy or with the right connections. Perhaps the real question ought to be whether or not America can afford to ignore and sideline so many experienced people when it comes to jobs.
9
@hen3ry
Spot on. Employers do not want to pay for experience, and are leaving many mid-career professionals behind. Capitalism is a cancer that has metastasized throughout every corner of our lives.
This is literally the only way that appropriate funding can be made a reality in higher ed: through back-door arrangements that essentially function as resource redistributors.
And so maybe we just add private school tuition and grad school as well. So? Let me be clear: none of what is said negatively about the 'damage' of cancelling student loan debt seems unconvincing at best.
A more workable solution would be to cancel substantial chunks of current debt, instead of all debt, and then increase Pell Grant amounts substantially to make both public and private college more affordable for borrowers, not free. Students should still have some skin in the game, but instead of being saddled with crushing debt, they would have much more serviceable debt. But this approach also needs to hold colleges more accountable for their pricing, by putting a cap on price increases in line with inflation. For too long, colleges have raised prices beyond the rate of inflation, with seemingly no adults in the room putting the brakes on.
3
I'm glad The Upshot is doing it's work. I would just suggest for it to be a little more realistic in it's criticism. How about getting a few economists to comment on the proposals? Pro and con. Cancelling student loan debt actually would make SOME problems disappear for SOME people. As a taxpayer, for the good of the country, and it's future, I am willing to help. WHENEVER the government does something, there could and probably will be unintended consequences. This is not an argument, in and of itself, against doing ANYTHING.
8
For profits should not qualify-They are for profit businesses and are known to be worthless. Its the lobby money that allows them to be in business.
Junior colleges, all free, and this should be the plan. If a student shows they indeed want to be a student and can do the work they prove this in JC and then transfer to a legitimate college. All paid for.
If a student does not want to be an academic graduate they attend a JC that teaches, electrical repair, plumbing, welding, nursing, etc. and are subsidized as long as they attend and are successful. Then the various occupations have robust apprentice programs for them to get experience and a job.
Education is a right and a necessity for any nation. The private for profits is another corporate capitalism designed for business profit not educating our future citizens. Remember the Trump Private become a millionaire school?
4
@RichardHead
Is Harvard or any other non-profit really that?
With the size of their endowments, and investments, they are just not for profit in name only.
1
@RichardHead
In the previous millennium, I had a nearly useless BA with honors in English, Phi Beta Kappa, from a public university. I could not find a job because I didn’t type! I went to a for-profit and learned typing and other office skills, taking a student loan to do so. I paid it back within a few years.
I think education in the liberal arts is truly educating, but for job skills, there has to be training available as well. Community colleges seem to be doing a good job today. Students need to understand the costs and better of any program they are considering.
@MS
Non-profit means that they are not owned by shareholders who may receive dividends or sell their shares.
"Canceling Student Loan Debt Doesn’t Make Problems Disappear."
The debt is not cancelled, per se. It is transferred to taxpayers.
43
@Moderate Republican The country’s infrastructure is paid by the tax payer too. Education is part of the infrastructure of a thriving nation.
8
@Curt Devereux ‘85 IM finisher A thousand times yes! It's amazing how many people do not understand that.
@Joy Thompson
Its more amazing how many people understand that completely, and consider it a wise investment, like clean water, safe roads, reliable food.
Its amazing how many people do not understand that, and how confident they are they're smarter than everyone else. Just amazing.
The availability of student loans has let colleges increase tuition and fees at rates well in excess of inflation. Loan forgiveness will merely accelerate that trend and reward the most profligate among us while penalizing those who saved and worked their way through school.
The taxpayer should not be funding higher education. Make schools 100% responsible for any loan defaults from their students or former students.
4
The title is misleading because forgiving student loan debt would make MY problems go a way - and I think there are a lot in the same boat.
2
These plans are all fundamentally flawed because they do not deal with the cost of college. State schools have lost most of their public funding and most are public in name only with less than 20 or even 10 percent of their budgets coming from their respective states. They are funded by tuition. All colleges and universities have bloated and over paid administrators.
No loans should be given to attend for-profit institutions.
My husband and I are liberal college professors. We have two cars, one a 20 year Honda, the other a 15 year old Toyota. We live in a small starter house and buy our clothes at Target. We saved money so our two kids could attend a public university without loans.
I would like there to be sufficient grants such that the truly needy get to attend college, but why should those who bought or leased brand new cars for the last 20 years get a free ride when we prioritized education in our family.
If liberals like us hate this plan, it will be hard to win back the independents.
We need real structural change in how universities are funded and in the amount of grants and work-study provided to the truly needy, not a blank check to the for profit colleges.
130
@Liza
Neither of these proposals would allow funding towards for-profit colleges/universities.
It is truly unfortunate that you and your husband were forced to make real decisions between quality of life and the education of your children. That was unfair towards your family and in a better world, your children would be able to achieve their highest levels of academic success and rank without need for your life savings.
What made your family decide not to use a tuition waiver? My understanding is that it is a standard benefit for Tenured/Tenure-track professors to receive tuition waivers for their kids (assuming they are accepted).
3
@WallaWalla. Please know that very few colleges/universities give full tuition waivers to children of faculty. And as for parents saving/budgeting to fund their students’ college education is not a deprivation; rather those parents are teaching their children that everything has a cost, which is a fact of life! An invaluable lesson. Parents who have nothing left over from a minimum/minimal wage paycheck to save for their kids’ college also teach a huge lesson to their children: do everything you can to prepare for and maintain a
Living wage job.
7
Two things I don't understand about financial aid these days - what happened to scholarships and grants? Everyone seems to be financing their education 100% with loans. Second, how is it that students have access to the loan money? Are there restrictions on how the money can be used? I went to college when the dinosaurs roamed the earth. 90% of my tuition was covered by scholarships and grants and the remainder was loans. The majority of the loans were paid directly to the school, the others were paid by check made out to me AND the school and I had to sign the checks over to the school. I did not have access to that money at all which was probably a good thing.
I hear often of noneducational things students are doing with their "school money," such as high-end spring break vacations, designer clothing and shoes, etc. Is that part of the reason why the loan balances are so high?
4
@Lynn in DC no, it's not so much the (no doubt real but also very) anecdotal examples you're referring to. Rather, it's largely because the costs of college have skyrocketed - especially, for example, as states have cut back on education funding, which means state universities have to raise tuition to cover the gap. And that's to say nothing of how much private universities also charge - or for-profit schools, which are just unbelievably awful.
Of course, some would probably say "well, I got a job and was able to pay for college doing that" - to which I would say, "How is that supposed to help when the federal minimum wage today is worth less than it was in the 1960s?" So there's that too.
5
@Lynn in DC
Scholarships & Grants are minimal. A Pell Grant provides the bare-bones basics and state scholarships are nominal too. Typically, the legendary "Full-ride" school scholarship goes to but a few. Student Loans are the only substantial consistent means to finance today's education. Additionally, many non-university students (those attending for-profit trade schools) also tend to need more funding than the Pell Grants provided.
There is plenty of data (easily googled) on why student debt is so high. Not sure where ( or who )you are 'hearing' about partying and buying designer shoes with student financial aid. That part of your comment is rather troubling because you include it without any references.
5
@Lynn in DC
If you went to college when dinosaurs roamed the earth, you could have earned your tuition working a part time summer job for minimum wage.
That is no longer the case, and hasn't been so for decades.
If you "hear often" that students are going on fancy vacations with their school money, perhaps you should visit the world outside of DC conservative circles. Those free wheeling vacationing students are as real as welfare queens. Spoiler, real college for the vast majority of people is not like movie "Animal House", either.
5
It is impossible to design a large-scale program of loan forgiveness without significant unfairness and resentment, which will be felt mainly by the families that provided reasonably for their children’s education, and by the students who acted with prudence and foresight.
In other words, the people who actually valued education will be punished the most, given that the money must ultimately come from middle class taxpayers. And even if the taxes can be made to fall more equally, the basic unfairness will remain.
The supporters of Mr. Sanders and Ms. Warren should be very careful about endorsing their plans for debt cancellation. Their appeal only goes so far.
19
@Global Charm
There will always be the Resentful.
3
@Global Charm
How is it a punishment for you when somebody else receives something? Literally nothing is being taken away from you.
This is like people complaining about not getting food stamps because they're not eligible. If living off social assistance is so great, then sell your assets and soon enough you'll be poor too. You'll feel super special when you can't afford your dentist bills, too.
5
Those of us who worked three jobs, didn’t buy a car, and didn’t pursue degrees we couldn’t afford VERY NATURALLY won’t be comfortable with these bills. And it’s not sour grapes. The majority of the loans, as the article states, are for graduate school. I am all for forgiving undergrad debt (even though I worked multiple jobs to afford it), but graduate school debt can be avoided. The food stamp analogy doesn’t hold: people need to eat. People don’t need to max out loans to pay for graduate school.
I think we need to teach Personal Finance in high school. I didn’t open a Roth until I was in my 30’s because I didn’t understand it. I knew to avoid debt (or prioritize paying it off), but I had no concept of saving and investing. I’m sure I’m not alone.
2
Cancelling debt but not reforming the system that created it is no solution, it's a politician's give-away. Cancel the government program that promoted the reckless borrowing too. But what are the odds that today's increasingly socialist left gets that? That's why voters like me aren't Democrats.
9
Sure, there are many issues that will need to be addressed. Bernie proposes a financial transaction tax of 1/2 of 1%. A
painless tax of 1% would raise hundreds of billions annually.
Why not? Kids are the future of our country.
4
@DLM
The Sanders plan would obviously boost discretionary spending in millions of households, spur more entrepreneurship & effectively provide an economic boost.
For those who have forgotten, it was when Bush handed 'debt collection' to private consumer credit debt collectors that student loan interest rates really skyrocketed -- together with default rates.
Punishing America's best & brightest for having the courage, stamina & ambition to attend college is a self-destructive method of damaging our own competitiveness & future economic growth.
Stop punishing our young people! Someone earning $1800 actual take-home from an entry-level job is not going to be able to make a $500 monthly payment, or even a $250 monthly payment on college debt.
The Dems introduced a few improvements, but the immensity of the burden for anyone not born with inherited wealth cannot be overstated.
It is disproportionately harder for young women, who are often paid less than their brothers & who may also have a child or two a to support.
Effectively, student debt makes college unaffordable for many, thereby trapping one segment of our youth in permanent loss of opportunity, while trapping another segment with what amounts to debt slavery that can last for many decades...
The only people who gain are the consumer credit collection companies. Why should they? Did they do the actual work? Why should 1 middleman skim 5% or more in pure profit off the inflated price of college debt from 1000s?
5
First undertake the reforms that will be unpopular with the business interests. Put the brakes on loans from for-profit colleges that have terrible graduation rates and don't result in their students getting jobs. Stop approving loans to people who clearly have negligible likelihood of being able to pay them back. Put an upward limit on the amount of loans. Stop loaning money for living expenses--tuition only. Make interest rates fairer, and improve the sloppy (even corrupt) administration of the loans. Make sure all colleges have skin in the game to insure loans are not excessive or unlikely to be paid back. Stop making this program nothing but a honeypot for banks, colleges and con artists.
When these things are done, then we can talk about loan forgiveness.
9
1) People do not value anything that is provided them for 'free'.
2) Nothing is ever 'free'. The colleges will still have to be paid for providing education so taxpayers foot the bill.
12
@B Dawson
I received a superb education in k-12 public schools and think it was very valuable. My parents paid taxes, along with all homeowners. I paid nothing and when I listen to conservative hogwash, I am ever more grateful to my extraordinary teachers.
1
The student loan “crisis” has developed over decades with schools, lenders, the government, and the borrowers all playing willing roles. Unwinding couldn’t possibly be simple, and it is unlikely even those “forgiven” will be whole immediately. As small private colleges close, a resolution that somehow preserves the system without mortgaging lives must be found.
Buying the votes of irresponsible young adults, with the tax dollars of responsible adults. I'm not paying for some kid's Psych degree from the local Catholic college. No thanks..
How about starting with a cap of 2% interest on federal student loans? It shouldn't be a profit center, but a service.
How about follow that with a focused look into administrative bloat? The Detroit Free Press recent ran an article on the total staff costs of the new VP/Director/Asst of Inclusion and Diversity at the University of Michigan. Each college within the university has such a staff, for a total cost of $11 million per year. $11 million!! That would fund almost 700 full ride scholarships. Inclusion vs full ride.. Hmm...
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Besides the utter impracticality of "free college," Sanders' invoking the FTT on Wall Street (actually anyone who has retirement accounts) is nothing but unadorned class warfare. The FTT is red meat for the far left in the same way as drilling in the ANWR is for the far right. Both are really bad ideas.
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@TMS I have a hard time understanding why the FTT is such a “really bad idea.” Investors of all sizes already pay transaction fees to their brokerages that are significantly higher than what Sanders is proposing be paid to the US Treasury. And BTW, practically free college in state schools used to be the norm when they were funded adequately by the states and before the feds made it profitable to loan directly to students at usurious rates with no oversight. I know because I have two degrees from two different state schools (BM, Wichita State University 1993 and MM, SUNY Binghamton 1996) that cost me literally less than $5,000 in total because I graduated in the top 10% of my high school class and was granted a tuition waiver and Teaching Assistantship while pursuing my Masters degree. Today, top students are guaranteed a spot at a public university but usually little to no scholarships and graduate schools are loaded up with adjunct professors that they usually pay less than what a tuition waiver would be if they offered those slots to students.
I want to live in this author's world where the pejorative "just" refers to 45%.
I think it reveals a serious bias.
We are going to raise your rent by "just" 45% or you lost "just" 45% of your body function?
"only 45 percent of student loans are used to attend public colleges and universities"
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@rb As the article points out, in addition to loans to public education debt being 45%, the loans for undergraduate education is much less. The bulk of loans go to (a) private universities, and (b) graduate programs.
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The existing debt through 2019 should be cancelled and a new plan for new funding for college education should be put into place. The banks and lending agencies and universities were making a killing in absurd ways and interests rates on all of the students. They received their money, but now they should pay the price for such greed and disgusting policies and abuse.
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I’m not very happy with the Corvette and Porsche’s that I purchased a few years back. Making the payments has been very difficult and I thought they’d be a good investment. Yeah, I know a Honda or Toyota would have been something I could actually afford but I figured some candidate would come along that would advocate the forgiveness of auto loans.
Seriously folks, make a decision and live with it. I did and I simply resent having to pay for your bad decision. A bad decision which was not made once but year after year. Two years into that expensive school, you could have made a decision to help yourself.
I would never vote the fool in the White House back into office, but I do hope that rational thought takes over before we make people decide.
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Trump actually had a good idea on bringing down costs. Hard cap and the schools would be forced to lower tuition or starve. This nonsense about waiving a trillion dollars, absurd. Our economy can't take a trillion dollar hit.
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@Stubbs Yet somehow we could afford a $1.5 trillion tax cut? That even with an increased economic growth rate resulted in a drop in federal revenues in the first year? Amazing how Republicans still can sell tax cuts to the public as a net positive to our economy when the truth is presented over and over...https://www.nytimes.com/2019/01/11/business/trump-tax-cuts-revenue.html
Every business person in the world will tell you that the way to make money is to spend money (i.e. invest in your business) and yet Americans can’t seem to understand that our people are our product. Investing in their education and well-being and enabling their entrepreneurial instincts should be our driving goal in all policy decisions.
Talk about winners and losers. Kids who worked their way through college were suckers - kids whose parents scrimped and saved instead of borrowing were suckers - kids who didn't load up on debt were suckers - kids who didn't borrow to finance a junior year abroad were suckers - kids who went to public universities instead of private due to cost were suckers.
And on an on. And who is going to pay to make up for the lost tuition if college is free? We have seen public higher education decimated by politicians looking to cut expenses. They cannot be trusted to actually increase revenue to the school.
This is another example of how high minded dreamers with no real world experience lead us to ruin. And don't ask Jane Sanders for advice - we know what happened to HER college when she was president.
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Looking for ways to cull your list of Democrat nominees? This does it.
These poorly thought out plans, with unintended consequences both foreseen and not, have helped me rule out Warren and Sanders as serious contenders.
Warren I'd love to see as head of the DOJ in a Democrat administration; Bernie, well, it was fun having you as a kind of conscience for the party.
Reform must come in this area of course; 8 percent loans to students at this time in our economy are ridiculously unfair.
But forgiving the debt entirely will encourage even more misspent educational dollars, and further obsfucate the fact that, in California for example, state universities are free if your family earns less than 80K.
So bring on the more rational Democrat candidates, and leave the rosy-eyed lying to Trump.
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It‘s important to start somewhere with our education mess and eliminating past debt is a good way to do that.
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