Student debt forgiveness | Perception Matters
How those who created the student debt crisis claim to have found a solution
Despite making up only 13% of the college degreed population, graduate degree holders make up 56% of student loan debts
Trickle down economics is back or is it seep up?
blame shifting
People still pay off college and buy homes in their 20s. There has also been a change in how many people think they “need” to got o college and what sort of degrees they get. There are still colleges that cost single digit % of median salary. As for taxation what’s that got to do with the colleges or home ownership? Is a ‘MAGA Boomer” typically in the top marginal rate?
Older generations may have voted in crap politicians with crap policies but millennials continued that practice too and bought crap you must go to college rhetoric. It is not one political party over the other but more of a fantasy twist on the ‘American dream” that does not fit reality. The racket is being shipped to other countries now and its not good there either.
This is a failure of parents who were also duped. I’d say teachers and politicians too but with them its a feature of what they do to keep their jobs in the current system. It is normal to rationalize selling sub par to outright harmful things to others for a living. Morality isn’t human nature.
Welfare spending has also gone up since the boomer times and does not look like it’s dropping anytime soon but we don’t often see the occupy democrats type talk about that. Went from roughly 5 billion in 1960 to 280 billion in 2013. This counts Federal level income security programs such as welfare and social services. In addition to Supplemental Nutrition Assistance Programs. Population was 179 million in 1960 and 316 million in 2013.
You can try and shift blame to the previous generations all you want for cost of school and other effects of the ongoing state ran, fiat currency fueled inflation of the financial economy, but the current generations also play their part in supporting politicians and policies that continue the same effect. I get that things seem worse when they harm you but shall not pretend that once one is of adult age they should take some more responsibility over lies they may have been told as children.
For example Biden has been voted in before the student loan crisis, remained being voted in during it and now according to some was fortified into it at its largest form in part by promising to do something about the very thing he and his ilk played a part in instituting.
the politics as usual in the ointment
Shall heavily refer to this “JOE BIDEN’S ROLE IN CREATING THE STUDENT DEBT CRISIS STRETCHES BACK TO THE 1970S” article from the Intercept which outlines that Biden’s role in the student debt debacle. I imagine you cna have an update to this in 5 years when more of the effects of his cancelation scheme have been felt. As one of the most seasoned politicians ever voted into the presidency Joe Biden’s role in this morass runs back to the 50 years to the beginning of his political career:
“Early in his senatorial career, Biden played a role in making it easier for students and parents to take out burdensome loans, spanning across several decades. Later, his landmark bankruptcy reform legislation made it nearly impossible to discharge student loans, birthing a predatory industry and sinking millions into unsustainable levels of debt.”
The beginning, the middle and the end. Good old Joe from scranton was always there. Please pay no mind to people wondering if credit issuing companies with Delaware registered head quarters may have had some undue influence on the Delaware politician and his family. Not in the least. He’d have treated any lobbyist like he did Corn Pop and scadoodled them away!
“In 1978, Biden supported the Middle Income Student Assistance Act, which eliminated income restrictions on federal loans to expand eligibility to all students. Biden helped write a separate bill that year blocking students from seeking bankruptcy protections on those loans after graduation. (The income restrictions on federal loans were reinstated in 1981.) Then he went on to vote to create the Parent Loan for Undergraduate Students, or PLUS, program in 1980 and the Auxiliary Loans to Assist Students, or ALAS, program in 1981, which extended loan eligibility to students with no parental financial support.
Back not to a few paragraphs. Thought of sorter excerpts but all this is worth reading. This is politics as usual.
“Within a few years, the crackdown [on student debtors filing for bankruptcy] that began in 1978 would extend beyond just government loans. In 1984, as Biden was gaining seniority on the Judiciary Committee, the Delaware lawmaker reprised his role as one of his party’s top negotiators on a new legislative proposal,” the International Business-Times reported in 2015. “Under that bill — which was signed into law by President Ronald Reagan — bankruptcy exemptions were extended to non-higher-education loans like those for vocational schools, according to the U.S. Department of Education.”
Though Biden ultimately missed the vote for the Higher Education Amendments of 1986, he co-sponsored the legislation and said he would have voted for it if he were able to. (According to the Congressional Record, he had to be in Delaware for a family matter.) One of the most significant changes in the Higher Education reauthorization was a provision that prevented students in default under the Guaranteed Student Loan program from receiving new federal assistance. It also imposed new regulations that “helped fuel the development of lending-industry giants like Sallie Mae by creating barriers to entry to smaller, newer companies wanting to enter the field,” the think tank Education Sector wrote in a 2007 report.
“Loosened loan eligibility requirements, together with two new federal loan programs, increased student borrowing from $1.8 billion in 1977 to $12 billion in 1989,” the report said, referring to the Middle Income Student Assistance Act, and the PLUS and ALAS programs.
Years later, as a senator from Delaware, Biden was one of the most enthusiastic supporters of the disastrous 2005 bankruptcy bill that made it nearly impossible for borrowers to reduce their student loan debt. The Bankruptcy Abuse Prevention and Consumer Protection Act raised the bar for families to pursue Chapter 7 bankruptcy protections. It overwhelmingly passed in the Senate at the end of the Clinton administration, over the objections of Warren, then a bankruptcy expert who had tangled for years with Biden over the issue. She lobbied first lady Hillary Clinton, who herself persuaded Bill Clinton to veto it.”
Oh how the web of politics is unveiled. I don’t think Biden planned to do all this in order to in the future be some hero for undoing some of the effect, I just dont think that calculation is something the system required of politicians. It’s simply do what is expedient for any given time. Seeing the same names come up over and over again. May nto be a monarchy but there is a ruling class of sorts even in the USA. Warren may seem like some hero here but remember she was also hired into Harvard as a minority employee and paid handsomely by the same system that is still benefiting from the ability to ratchet up prices. Back to Biden though:
“Biden came back to the legislation under the Bush administration; it passed the Senate in 2005 on a 74-25 vote, with most Democratic lawmakers, including then-Sen. Barack Obama, voting against it. (Clinton, by then a senator from New York, voted for it.) George W. Bush signed it into law, and private student loan debt skyrocketed in the wake of its passage. The total amount of private student loan debt more than doubled between 2005 and 2011, growing from $55.9 billion to $140.2 billion, according to the Consumer Financial Protection Bureau.”
Good reminder once again that this is about the state. it isn’t a particularly left or right thing when it comes to schools. Even though upwards of 75% of people employed by schools vote for, donate to and support Democrats, both parties have been enthralled to the ‘won’t someone think of the children’ rhetoric that is very easy to use to gin up voter enthusiasm.
Here are some details on what exactly discharability of debts is.
“BAPCPA also provided more protections to creditors because it expanded the exceptions to discharge. The presumption of fraud in the use of credit cards was expanded. The amount that the debtor must charge for “luxury goods” to invoke the presumption is reduced from $1,225 to $500. The amount of cash advances that would give rise to a presumption of fraud has also been reduced, from $1,225 to $750. The time period was increased from 60 days to 90 days. Thus, if a debtor purchases any single item for more than $500 within 90 days of filing, the presumption that the debt was incurred fraudulently and therefore non-dischargeable in the bankruptcy arises. Prior to BAPCPA, the presumption would not have arisen unless the purchase was for more than $1,225 and was made within 60 days of filing (§ 523(a)(2)(C)).
BAPCPA amended § 523(a)(8) to broaden the types of educational (“student”) loans that cannot be discharged in bankruptcy absent proof of “undue hardship.” The nature of the lender is no longer relevant. Thus, even loans from “for-profit” or “non-governmental” entities are not dischargeable.”
We are at the present now. Biden recently claimed the PANdemIC was over. this may be taken into account when the challenges come up to him claiming to use emergency PANdemIC powers to cancel debt but don’t think that will be enough to stop it. May be able to simply claim that it was signed in during the emergency. For example a significant amount of the trillions in stimulus budgeted for future payments. You can’t just rescind those because there no longer is a PANdemIC.
they swindled the kids into 100k of debt!
This is an example of the ‘why won’t someone think of the children’ rhetorical tactics that comes up in defense of this debt cancelation scheme. I have heard a similar one when it comes to dating dynamics. The man swindled the woman into the relationship or intercourse, so yeah he should pay alimony or she should nto be responsible for the result of the act intended to reproduce life. In those cases I wonder, do they think women are just low IQ humans incapable of sussing out sus people? Do they not have friends to help them vet people? Are parents and other relative no longer involved in their lives to give good advice?
In this case of loans for college it is actual children. Teens. But I agree that the you need to go to college to be successful messaging starts when they are kids. Before their teens. May as well call it a k-post grad track in much of the country now. But this messaging is not only to the kids.
The kids have parents too. I would get some of this wording in the line of “These kids don’t understand what they’re agreeing to” for orphans without guardians. Kid’s can’t sign those loans on their ow,n. Thet are kids. Kids also hear about owning cars, or starting businesses, being home owners but parents and institutions don’t just allow them to take on tens of thousands in debt to do so after graduating high school. And outside of this even orphans without guardians manage to avoid taking on debt or find ways to pay for what the accrue.
Average student debt is $32,731 (Average Student Loan Debt in America: Facts & Figures) but I see folk say “kids” and tie it to the 100K range that are more often those who went back to get post graduate degrees and have had time to see others struggle to pay off loans post school or those who worked during school to pay them off. So it’s not exactly just lil kids who didn’t know nothing but rather people i their 20s and sometimes 30’s who also vote and participate in society as an adult. I think 10k is a lot to most debtors. Im sure they’d prefer more but even 10$ is something considering the struggles many are going through. Still kinda odd to me how mostly Americans scoff at certain amounts of money.
If they didn’t know what they were doing should they also be denied the ability to vote? The inflation in house prices is tied to other policies not just student debts. Some argue that in general you earn more with a degree so even if paying back Y percent from your higher Z salary may still have the same X towards housing. I’d support a system that had the schools responsible for some of the debt. Have debtors degrees rescinded for not paying for whatever they agreed to pay for. Tie it in to at least 10 years of a ding on credit rating and institute a system where you can’t vote until student loans are paid off if it’s a situation of you were swindled into making this bad decision.
Biden’s move is illegal without the context of the PANdemIC emergency powers, but it is the state so who cares about that? Use the PANdemIC excuse to declare the scheme then use it as a plank of 2024 campaigning. If they were serious about fixing the student loan debt crisis they would address the government policy incentivizing schools to harvest students as cash crops and present this in congress and make a case for it as set laws but then that may affect the donor businesses that count on debt burdened employees limit of mobility, public service institutions that offer debt forgiveness schemes attracting people form private sector jobs, and upwards of 95% donation to Dems by adults employed in schools and college, among other things.
So now another cohort can be added to the generations that had the state government redistribute some gibs to them. Now continue to claim it’t the older generations of citizens that are responsible for the financial state of the economy while you benefit from your bailout. Wait a few years and see how that feels when the future generations point to you and the filthy lucre you welcomed.
videos of the post
Stephen joins me to discuss this post and more in a conversation.
Series of Stephen & I discussing “Cracks in the Ivory Tower: The Moral Mess of Higher Education” by Jason Brennan and Phillip Magness
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