
Obama Forgives Student Debt Of 400,000 Americans - randomname2
http://www.marketwatch.com/story/why-obama-is-forgiving-the-student-loans-of-nearly-400000-people-2016-04-12
======
readams
Government-guaranteed loans are a fantastic way to force prices to spiral out
of control. The way student loans were before income-based repayment, we'd
have expected college cost to rise until it meets the lifetime expected
benefit of college discounted to the present.

With income-based repayment, where your loan balance is forgiven after 20
years, there is no limit to how high it can go.

Government-subsidized mortages and mortgage interest deductions have a
similarly terrible effect on housing, a basic good that government policy
should try to make as cheap as possible. Instead, government policy is to make
it as expensive as possible.

~~~
specialist
_The way student loans were before..._

No.

Tuition went up to compensate for the removal of state subsidizing tuition.
Almost 1:1. In fact, with the removal of state support, we're merely seeing
the true costs of school for the first time.

Loans got nutty because of unnecessary privatization and deregulation. But
rent seeking, so it was inevitable, right?

Once tuitions were nutty, parents demanded value for their dollar, begatting
grade inflation and transmuting dorms into resort hotels, fueling continued
rising costs.

Source: Worked in higher ed. This is common knowledge.

(I don't know enough to explain the textbook racket. Collusion?)

\--

 _mortgage interest deductions have a similarly terrible effect on housing..._

No.

Scarcity caused by NIMBY land use policy is driving up housing costs. The fix
is aggressive upzoning.

Source: Help friends who work on affordable housing policy. This is common
knowledge.

\--

In conclusion, yes, simplistic Freedom Markets (tm) explanations are
seductive. But they're also mostly wrong. Tuition and loans went bonkers when
government pulled out of the business, allowing the predators to take over.

~~~
hardcandy
You're missing the forest for the trees. What are ''the true costs of
school''? Someone who loves to teach sitting in a classroom teaching. It can
be dirt cheap or it can be very expensive. Supply and demand sorts out the
details. As more money flowed into the system, administration bloated and
became its own entrenched interest group, with very little connection to
actual education.[1] Does the UC system need 500 administrators making >$500k
year each?[2] As it stands, college for most of my friends was a 4 year social
safari interrupted by infrequent periods of intense cramming in between high
school and joining the work force. Do you think the average 18-21 year old at
a state school is a scholar passionately indulging their love of learning?
Almost all education is self education at the end of the day. As soon as we
solve for the credentialing/pedigree/signaling problem, online education will
destroy a huge amount of offline education and rightly so.

As for the mortgage interest deduction, how wouldn't it boost housing prices?
It effectively lowers the mortage rate by your marginal tax bracket which is
close to 50% in California. So instead of a 3.5% 30 year rate I'm now below
2%. Cheaper money stimulates borrowing. It doesn't matter how low NIMBYism
pushes supply in the face of overwhelming demand, each individual still has a
maximum price they can pay, and subsidized interest rates raise that price
point.

[1] [http://reclaimuc.blogspot.com/2011/09/senior-
administrators-...](http://reclaimuc.blogspot.com/2011/09/senior-
administrators-now-officially.html)

[2] [http://www.latimes.com/local/education/la-me-uc-
spending-201...](http://www.latimes.com/local/education/la-me-uc-
spending-20151011-story.html)

~~~
greeneggs
> Does the UC system need 500 administrators making >$500k year each?

This statistic is incorrect. In 2014, there were 445 UC employees making
>$500K/year each. This includes _everybody_ , not just administrators.

You can get a list of them all here [1]. I didn't go through the whole list,
but from sampling a few random pages, I'd guess that there are <20
administrators making >$500K. They are mostly medical school professors, some
athletic coaches, and, e.g., the Chief Investment Officer. There are also some
CFOs and Executive Deans, and maybe I missed something, so feel free to
correct me.

[1] [https://ucannualwage.ucop.edu/wage/](https://ucannualwage.ucop.edu/wage/)

~~~
paganel
> This statistic is incorrect. In 2014, there were 445 UC employees making
> >$500K/year each. This includes everybody, not everybody, not just
> administrators.

Not the OP, but what you're saying just proves him/her right. You're basically
saying that he/she had provided a number with only 10% margin of error (which
on the Internets is not bad) and then went all semantics on him/her, I'm
talking about the part with the people not being "administrators". For better
or for worse you can call a person earning >$500k a janitor on her/his
employment papers, but I'm still 99.99% sure that person is still doing highly
administrative tasks (like setting up golf matches in his/her google calendar)
and not mopping the floors.

And the part where you say that artificially subsidizing a finite product (in
this case houses) does not cause its price to go up makes me wish that you're
not in any way related to the economics discipline. Because if you were then
I'd say that the future does not look bright for students of economics.

~~~
saturdaysaint
There is a vast, non-semantic difference between having 500 rich
administrators/functionaries and having 445 _employees_. How exactly do you
hire someone capable of instructing surgeons without paying them like a
surgeon? Once you take out the highly skilled/specialist doctors, it's not a
very damning list for a vast school system.

~~~
paganel
I stand corrected. I actually visited
[https://ucannualwage.ucop.edu/wage/](https://ucannualwage.ucop.edu/wage/) and
played with the search settings a little and found out that out of the 445
employees with earnings >$500k about 380 or so have "prof" in their title, so
I guess you're right.

Fact is that the cost of university is still too damn high. If it's not the
teachers' salaries then what might the reason be?

Mind you, I'm not directly involved in this as I live half a globe away from
the States and I'm a former college dropout now in my mid-30s, I'm just
thinking that there are huge opportunity costs that we might pay, as a
species, for not letting the brightest people attend University based on
intellectual merits alone. I know that there are countless "help-the-poor-
attend-university" programs, but, as far as I can tell, in order to be part of
one you need make no mistakes, as in you need to pass all the exams in order
for the financial help to keep coming (I might be wrong on this). Plus,
there's all the bright lower-middle-class people whose parents are "too rich"
for their kids to receive any financial help but too poor to afford to pay
their kids' university. You risk losing these people's minds big time.

As a solution I would impose only having access to University if you pass an
entry exam, and everything to be subsidized by the State. It doesn't matter if
your dad is the President of America or the CIA chief, it doesn't matter if
your dad has paid $100 million to the University, it doesn't matter if you're
white, black, yellow or purple-colored. Only your intellectual ability should
count.

------
jeffdavis
As with medicine, college is now an industry with third-party payment and no
third-party control.

In other words, the student (patient) and the university
(doctor/hospital/pharmacy) agree to do business, and the government (insurance
company) pays regardless of the price.

That obviously creates major price distortions. Expect college to get a lot
more expensive before it gets cheaper.

~~~
api
This happens to any good or service that everyone needs but that we stubbornly
refuse to fund publically.

~~~
bmj
I'm not sure that everyone needs to go to college. Does a plumber, or
electrician, or some other craftsperson that can learn via mentoring really
need to spend fours at university? I don't really think so.

That's always been my beef with the "college for everyone" movements. That
instantly de-values jobs that don't require a college education.

~~~
xg15
I'd wager to say though that jobs without college education are much more
likely to be outsourced/automated than jobs with one. (The opposite is not
true - a lot of jobs _with_ college education might be automated as well)

But anyway, your statement may be true but how do you determine who "needs" to
go to college and who doesn't?

If I (as a European) remember correctly, one of the US core values is the
pursuit of happiness. That would imply to me that everyone should at least be
given the chance to go to college - whether or not they decide to go (and
graduate) is a different question.

~~~
bmj
How do you outsource an electrician, or a carpenter?

 _If I (as a European) remember correctly, one of the US core values is the
pursuit of happiness. That would imply to me that everyone should at least be
given the chance to go to college - whether or not they decide to go (and
graduate) is a different question._

I don't disagree with this, necessarily. I disagree with rhetoric that implies
if you don't go to college, you are a second class citizen.

~~~
xg15
_How do you outsource an electrician, or a carpenter?_

I have no idea. But a few years ago, you could have said the same about truck
or taxi drivers - and now it seems feasible that those jobs will be automated
away in ten years.

For electricians, you could imagine that IoT/home automation tech will change
a lot: Home electrics could become more complex and more locked-down,
requiring additional qualifications. In the worst case, independent
electricians could find themselves in a similar situation that independent car
repair shops are today.

Or a company like TaskRabbit could employ their own
electricians/plumbers/carpenters/etc... (at worse conditions) and decide to
roll up the market.

Those are wild guesses. But my point is that jobs may change quickly in the
future. having a broad education and additional qualifications gives you a
better chance to deal with "disruption" in your area.

 _I disagree with rhetoric that implies if you don 't go to college, you are a
second class citizen._

That's not what I wanted to tell. But I don't think we are in a position to
decide that. And I don't think it's correct to simply assume that college
education plays no role and to conclude from that assumption that it's OK if
certain people never get the choice to go to college.

~~~
bmj
_For electricians, you could imagine that IoT /home automation tech will
change a lot: Home electrics could become more complex and more locked-down,
requiring additional qualifications. In the worst case, independent
electricians could find themselves in a similar situation that independent car
repair shops are today._

I would see this going in the direction of some auto mechanics--that you have
to be certified by a particular company in order to work on their equipment.
But, yes, as you point out, independent electricians, as a vocation, aren't
going anywhere soon. There are too many homes (particularly in the east) with
very old wiring.

------
homulilly
This title is incredibly misleading. All the Obama administration is doing is
providing a streamlined process to people who are already eligible to have
their debt forgiven.

For the people moaning about "wealth redistribution" or wasting taxpayer
money: These are people who are already unable to repay their loans. If
anything this will save money since it will cut down the overhead from the
government garnishing social security checks to repay its self (which would be
laughable if it wasn't happening to real people).

~~~
jeffdavis
"already eligible to have their debt forgiven"

Without checking their documentation through the normal process.

~~~
niccaluim
Their documentation has already been checked by the Social Security
Administration.

~~~
andrewpi
An agency that is in the middle of a scandal involving fraudulent disability
adjudications: [http://www.washingtontimes.com/news/2016/apr/11/social-
secur...](http://www.washingtontimes.com/news/2016/apr/11/social-security-
still-paying-potentially-bogus-dis/)

------
jeffdavis
Education is cheap. Teachers aren't often paid very much, good books and other
materials are usually not very expensive, and a building is just a building.
Labs can be pricey, but only required for some subjects.

So universities are like expensive social clubs that build your network and
enhance your social standing, and they also happen to teach. Remember that
when it becomes a "need" that should be "accessible to everyone".

The community college system is great. Cheap, available to everyone, and high
quality teaching (in my experience). Why not allow them to handle education up
to a bachelor's degree and universities can handle the functions of research
and undergraduate social club for people who can pay?

One compromise approach would be to deny federal loans (or undischargable
private student loans) for university until they have completed all the
relevant classes at a community college (possibly with loans).

(And no, I don't think community college should be free. I think that will
destroy them.)

~~~
sago
I almost agree, but this: universities are like expensive social clubs, I
think glosses over the source of their unique position.

Their monopoly comes from them being the de facto certification authority (not
just de-facto - many professions have statutory licensing requirements, making
them a government-enforced authority). You don't (normally) go to university
to get an education, you go to get a degree.

Universities will grant you the degree, but they require you to buy their in-
house very very expensive education packages first, whether or not you need
them. If I could ace every final exam tomorrow, I'd still have to pay for all
the courses, for all that totally superfluous education, before they'd certify
me.

This will not change until universities are no longer both the certification
authority and the education provider. Only then will they have to actually
compete on whether they are (as they claim) the most cost-effective way of
being educated to a required standard.

~~~
ThrustVectoring
There's legal restrictions on other forms of competing for jobs, which creates
a vacuum that higher education fills.

Consider IQ. It's very relevant for job performance, particularly entry-level.
Companies will generally get sued if they try to directly measure and test IQ
of job applicants.

On the other hand, companies are generally allowed to look at which university
you went to. Those universities make admissions decisions, in part, by looking
at your SAT score. That SAT score is highly correlated with general
intelligence.

So, as a hiring manager, you have a choice between, say, a Stanford graduate
and someone who went to an average state school. You can guess the relative IQ
of the applicants, and should have a preference over them.

The funny thing is that this hiring preference is completely independent of
anything that Stanford does, outside of its admissions department. It could
literally do nothing but put the kind of people who get accepted into Stanford
into a room together, and you'd still want to preferentially hire them.

~~~
idanoeman
IIRC the company can prove ahead of time that IQ is related to job
performance, and then they are allowed to use IQ as a way to select
candidates.

~~~
ThrustVectoring
That depends on what you mean by "allowed". "Will beat a discrimination
lawsuit" is a different standard than "will get sued for discrimination".

------
jpmattia
Boy are those debtors going to get a surprise when the 1099 comes for forgiven
debt. (they mention trying to eliminate the tax burden for the disability
folks, but no mention of anybody else.)

Edit: Or in plain english- the IRS thinks forgiven debt is income.

~~~
rdtsc
They might be able to legislate that away as well though, i.e. funds that
schools can prove they've received as payment of tuition and other approved
things (book?) to be tax exempt.

The discrepancy (i.e. funds used to travel to Europe for fun) instead of
paying for courses, will become income.

~~~
jpmattia
Sure, but it will literally take an act of Congress to cause an exemption.

The only time I can think of it happening previously was during the housing
meltdown. Normally a short sale/walking away from a house results in a 1099
for the unpaid mortgage principle. It was waived for a year or two. (There was
no attempting for "how" the money was spent. So loading up on toys and not
paying the mortgage was a strategy that got rewarded (assuming you enjoy the
stress of default.))

~~~
abalashov
_Normally a short sale /walking away from a house results in a 1099 for the
unpaid mortgage principle. _

Heh! If only! It depends on whether your equity is positive. If by chance you
owe more on your house than it's worth (i.e. the outstanding principal is not
satisfied by the foreclosure sale), there are only about ~11 states in which
one can simply walk away. The rest allow a lender to sue you for the
difference:

[http://www.nolo.com/legal-encyclopedia/whats-the-
difference-...](http://www.nolo.com/legal-encyclopedia/whats-the-difference-
between-recourse-nonrecourse-loan.html)

That's currently happening to me here in Atlanta. I bought a $160K condo at
the top of the bubble in May 2007, right before the first wave of subprime-
related Fed rate cuts. Because it was a relatively high-interest loan (good
for May 2007, when Fed rates were at their peak, but laughable three months
later), I still owed $140K on it when I chose to default in 2014-15, and when
it was foreclosed in summer 2015, it was sold for $85K. I'm currently being
sued by the lender(s) for the $55K.

~~~
jpmattia
Fair enough, and there's an additional level of complication here in CA: The
original loan is non-recourse, but a refinance is recourse. So a lot of folks
did not fully understand that the offer to refinance an underwater home at a
low interest rate was probably worse than just walking away.

I think it used to be rare for filing of deficiency suits, so my sympathies on
your situation.

~~~
abalashov
Considering my very negative asset picture, my attorney was very surprised
that I was sued, let alone for the full deficiency. He wasn't expecting that.

I think a paralegal from the lender's firm just Googled me, concluded I was a
"business guy" (so, moneybags), and put me in the "probably can pay us"
bucket. Oh, if only they knew how wrong that assumption is. This is one
unintended consequence of having to present a successful image to the world
for marketing purposes; it makes your creditors think you got Gs.

~~~
jpmattia
> _I think a paralegal from the lender 's firm just Googled me, concluded I
> was a "business guy" (so, moneybags)_

That's a good guess imo. One side effect of the housing bubble is that banks
decimated their loan-recovery units on the way up (because how would a loan
ever go bad when prices are rocketing? You just force a sale. So lay off most
of the recovery personnel.)

As a consequence, when the market went south the recovery efforts were second
rate, which probably explains why the bank is wasting its time going after
you. But you knew that. :)

In any case, good luck to you.

~~~
abalashov
Yeah, I just don't understand the justice of this scheme. Not to sound like
I've got a grudge to bear or a sob story -- it is what it is, and I generally
own my mistakes in life -- but, academically: I was barely 21 years old when I
got the condo, barely six months at qualifying income history, < 24 months of
credit history, hardly any money down. I was definitely a beneficiary of
Bubblicious underwriting conditions.

With the proviso that nobody foresaw the housing crisis in its eventual form,
how is it reasonable to impute 100% of the risk for the real estate market
going south on me? Who had the macroeconomic models and computers to evaluate
the property risk? The bank. Who ended up with the actual condo in hand, in
the end? The bank. Who had the actuarial data to evaluate me as a borrower?
The bank. Who got 6.5% APR on one loan and 8.25% APR on the other for 6-7
years? The bank.

So, why is it that the bank gets the upside of all of that, and I just get a
$55K lawsuit? I would not dispute the notion that I should bear some risk for
the value of the collateral, but, all of it? How does that make any sense?

~~~
jpmattia
> _With the proviso that nobody foresaw the housing crisis in its eventual
> form_

Believe it or not, there were a bunch of us that did and took action. See The
Big Short for some other examples.

Of course, nobody with a conflict of interest managed to see it (Ben Bernanke,
Fed Chair, Mark Zandi, Economist at S&P which was rating the trash AAA).

That you can miss predicting the biggest economic event in three generations
and still have a job as an economist is a testament to how broken that field
is.

> _How does that make any sense?_

Absolutely zero. And the fact that nobody is doing time for what happened is
itself a crime.

/rant, deep breaths.

~~~
abalashov
Yeah, well, sounds like you and I go on the same rant. I'm not even ranting
because I'm an aggrieved deficiency defendant; it's just the principle of the
thing that offends me, if you can believe that, utterly unrelated to my
personal financial liability. Nobody in my position should be getting boned
from all sides simultaneously when the banking sector, enabled by the easy-
money Fed, caused the whole phenomenon.

Of course, an aggravating factor in this case is that Atlanta was understood
to have a massive glut of condo development even before the subprime price
collapse. That's why condos in Atlanta still haven't recovered to anywhere
near pre-crisis levels, unlike freestanding houses. As of last summer, my unit
was worth 48% less than I paid for it. The point being, I was paying $1400/mo
in mortgage (mostly interest) (+$300-$400/mo in HOA dues!). A qualified buyer
can finance my place for $85K at like $350/mo now! :-) And I'm the one getting
sued.

------
jhspaybar
Glad to see our government reaching out to folks eligible for help that may
not realize it. If anything, this doesn't go far enough. Student loan debt
should be able to be discharged in bankruptcies!

~~~
JonFish85
Maybe, maybe not. If you restrict it too far, loans won't be made to people
who need it. What bank wants to lend $100k to a student who is going to
graduate, declare bankruptcy, then get a $150k/year job with no liabilities?
Obviously it's a contrived example, but the real trick of all this is lending
money to someone with no assets. Somehow you have to pay for those who can't
pay on their own: either interest rates go up, number of loans goes down--
neither of which is particularly good outcomes.

~~~
pitt1980
bankruptcy isn't exactly a get out of jail free card

I'm not an expert in this area, but I suspect if you're interested in
qualifying for a mortgage in the future, bankruptcy is something you should
think twice about

I'm not opposed to student debt having somewhat different standing from other
types of debt in bankruptcy proceedings

but I think playing with the mechanics of what moving around the standing of
student debt in bankruptcy proceedings would do, is probably a fruitful avenue
to explore as a society

\----------------

I'm not sure making it harder to take out 150-200K in student debt might not
be a step in the right direction, even if that's politically hard

~~~
nradov
A bankruptcy can only remain on a consumer's credit report for 10 years. And
even within that period, if the consumer pays other debts on time then after a
few years a bankruptcy will have only a minor impact on credit score. So for
someone who graduates from college at age 22 with $150K in student debt it
would be economically rational to immediately file bankruptcy and discharge
the debt. At worst he would have to wait until age 32 to qualify for a
mortgage, and probably not even that long. The government shouldn't encourage
this. We need to find ways to prevent students from needing to borrow so much
in first place.

------
arca_vorago
I have a theory that a properly functioning "mercantile capitalist" system
requires debt jubilees at regular intervals. Hammurabi was on to something
with debt jubilees and writing the law in the common tongue instead of the
priests tongue.

------
koder2016
Translation: money got redistributed from net tax payers to net tax non-
payers.

~~~
rm_-rf_slash
That's a funny way of saying "people who are disabled are no longer going to
be shaken down to pay student loans they have no way of paying."

~~~
loco5niner
I have my doubts about how many of these "disabled" are really "disabled".
Certainly some are. Certainly some are not.

~~~
wmeredith
Ah yes, remember: the poor people have your money:
[http://www.ibtimes.com/panama-papers-corporations-shifted-
ha...](http://www.ibtimes.com/panama-papers-corporations-shifted-half-
trillion-dollars-offshore-tax-havens-2012-2351814)

------
zkar
Who is eating this loss? Government? Individual tax payers? Someone or some
entity must be losing this $7.7 billion.

~~~
beeboop
Federal student loans are guaranteed by federal government. So the federal
government is losing the $7.7 billion.

~~~
jazzyk
Which means us, the taxpayers.

~~~
sp332
But do we, the voters, think it's worth it? I think it is, personally. Of
course it would be nice to move toward cheaper education, but I'm OK with this
forgiveness of debt.

------
ageofwant
There should never have been any debt in the first place. Most of Western
Europe provides education for free. Those societies understand that a lifetime
of taxes more than adequately repays any debt. Little of the rorting from
"education providers" we see her in Australia as well.

If fascist corporatism didn't ruin capitalism things may have been different.
But as it stands governments have a much better track record to deliver good
education outcomes than corporates. And that's saying much.

------
sremani
There are laws in some countries barring governments from declaring welfare
schemes in an election year. I hope this is not Election year pandering.

~~~
thebooktocome
Last I checked, Obama is not running for re-election, and it'd be hard to spin
this as a democratic party decision.

Also, he's enforcing a current law (loan forgiveness for total disability),
not making a new one.

~~~
sremani
This may be a new thing in US or perhaps the motivations are benign. Where I
come from every election cycle starts with a parade of sops and welfare
schemes targeting "weaker sections". Its hard not to be cynical about such
things, irrespective of the party affiliation or leadership.

------
dayaz36
Misleading title per usual. The program to discharge loans of disabled people
has always been there. Just made the process easier so more people are aware
of the program.

------
bcheung
Makes more sense to me to allow bankruptcy to apply to student loan debt than
to add even more rules and and exceptions to the laws.

------
jkot
There should be a cap on goverment guaranteed loan, perhaps $20k.

~~~
snuxoll
There are already lifetime and per-year limits on DoE loans.

------
blackflame7000
Everyone is created equal, and for those who aren't, the government will make
it so.

------
morgante
I don't have a problem with forgiveness for people who are actually disabled.
The problem is that in modern America, disability has become a catch-all for
anyone who can't find a job they want. With the right lawyer, minor
inconveniences will get you classified as disabled.

NPR did a great feature explaining the rise of disability as a catch-all
welfare tool: [http://apps.npr.org/unfit-for-work/](http://apps.npr.org/unfit-
for-work/)

------
beeboop
It's nice to see the paperwork hassle removed for something like this, but the
cynic in me can't help but think of the bank executives all across the country
popping corks on champagne over the multibillion dollar lump sum settlement on
loans that would have otherwise only trickled repayments in as people manually
filed paperwork. Essentially this means they're earning millions on the
billions that they can now reinvest immediately.

~~~
ikeboy
These are federal loans.

~~~
beeboop
My understanding is that there is a significant chunk of federal student loan
debt still owned by banks, and the older debt (pre 2010) would be more likely
to be in default due to permanent injury/disability.

~~~
ikeboy
I found [https://www.tuition.io/blog/2011/11/so-who-the-heck-owns-
my-...](https://www.tuition.io/blog/2011/11/so-who-the-heck-owns-my-student-
loan/)

>Guarantor. Up until 2010, many federal loans were issued via the FFEL
program, where private commercial lenders (i.e., banks) issued federally-
guaranteed loans. An act of Congress in 2010 eliminated the FFEL program, so
now all federal loans are issued directly by the U.S. Department of
Education’s Direct lending program.

So no banks were at risk anyway, everything was guaranteed by the feds.

------
rm_-rf_slash
I am glad this measure exists for the disabled Americans being shaken down to
pay down loans they cannot pay or have dissolved in bankruptcy.

However, as a professional with student loans, I will be furious until the day
I pay off my final loan at the 6.55% I am paying. I could get a car for
cheaper. And it is doubly ridiculous that federal loans can be farmed out to
private companies, which, spoiler alert, exist to make profits, not an
educated workforce!

As much as I would love to stop paying $300 every month (and every tax refund
till 2020), I am not that distressed about paying back an expensive and
lucrative education. However, the use of private companies charging usurious
rates is simply wrong.

~~~
jonknee
> However, as a professional with student loans, I will be furious until the
> day I pay off my final loan at the 6.55% I am paying. I could get a car for
> cheaper.

And you should be able to get a car (or house!) for cheaper because those are
items that can be sold to cover the outstanding loan balance. Secured credit
is always cheaper.

~~~
joeblossom
It'd be one thing if student loans were true unsecured debt but they're not.
The government backs most student loans (even private ones) and they are not
dismissible through bankruptcy. So, in some ways they're more "secure" than a
car/house/etc.

[https://enlightenme.com/secured-and-unsecured-
debt/](https://enlightenme.com/secured-and-unsecured-debt/) (there is a
mountain of other resources on student loan debt and how it differs)

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spoiledtechie
WTF. What ever happened to if your able, then you can work. Wow.

~~~
jonknee
I know it was tucked way down in the second sentence, but hey:

> The Department of Education will send letters to 387,000 people they’ve
> identified as being eligible for a _total and permanent disability
> discharge_ , a designation that allows federal student loan borrowers who
> can’t work because of a disability to have their loans forgiven.

~~~
bitchypat
I'd like to know how they are identified. Is it just because they've checked a
box along the way?

I'm relatively certain these people will not be required to submit a doctor's
written diagnosis of whatever causes their total and permanent disability.

It will probably be more like the gov sends a form to a list of people
(aggregated somehow), and if they fill it out and return it, then they get to
legally avoid their loan obligations.

~~~
Sanddancer
The article says that these people were identified by asking the Social
Security department who in a list of people with outstanding college loans had
already been diagnosed by a doctor with a permanent disability. They're
basically taking out a huge pain in the ass of these peoples' lives in having
to fight for this.

