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[flagged] Cancel student-loan debt? That’s making the working class subsidize the elite (nypost.com)
40 points by RickJWagner 2 days ago | hide | past | favorite | 138 comments





When everyone was praising the billionaire who paid for the student loans of that graduating class a few years ago (who by the way is under investigation for tax evasion), I raised the point that this might not be seen as fair by everyone and I was immediately criticized by some friends. I cautioned that it's fine for a private individual to do whatever he wants, but watch out if you apply this some day to the government.

Imagine how you would feel if you were from a family that had scrimped and saved to send you to college, you worked night jobs, etc. Only to find that at the end everyone else who had taken out loans had them forgiven (basically). What incentive is there to sacrifice or think ahead if this is what will happen at the end? I was panned for thinking such selfish thoughts at the act of someone so generous.

I think it would be more reasonable to give every student a $ gift at that point.

Watch out, mind you, if our government gets into the business of doing this. You'd better double check whether you think it's an absolute good thing.

When you pay someone's debts, you assume some participation into the choices they've made, or some small tacit approval of their choices. And when you forgive debt, it implicitly chooses some people over others. People who made what can objectively be called responsible choices to save and not take out debt will not be happy with what those who are less responsible receive.

Are we only going to do this for current students? Are we going to do this for every student to come? What happens when a person knows that whatever debt they take out will be forgiven?

Think to the unintended consequences of what you thought were just good intentions. If your level of logic is "what could be so wrong about helping people get out of hardship", then maybe you shouldn't be in the business of administering / making economic policy...


>Imagine how you would feel if you were from a family that had scrimped and saved to send you to college, you worked night jobs, etc. Only to find that at the end everyone else who had taken out loans had them forgiven (basically)

I think you might be surprised by how many people in that situation would be happy for those who benefited, even at the same time that they are upset that they landed on the other side of the timegate of the policy. Requiring "missed out" scenarios to not occur for any policy like this is too burdensome to society, and too conciliatory to the selfish who would rather the policy not happen at all if they weren't able to benefit from it.


I think you might be surprised, as a practical matter, that many people in the world are not happy when their prudent choices are invalidated by a change in the government policy in favor of others who took the opposite choice as you. And that they be called "selfish" for thinking so.

People working and making material sacrifices over their lifetimes only to see those burdens lifted for others are not a small edge case to be brushed away.

How about if I put it in a HN-relevant case (and to paint it in more obviously judgemental terms to make the point).

You and a colleague are given a 2-week deadline to deliver some code. It's a tough deadline. You are diligent and work day and night, overtime, missing your kids birthday and having your spouse mad at you, to meet the deadline and deliver your part. Your colleague has been a low performer consistently, asks your help to finish the work, doesn't actually finish it by the due date. Your boss, at the delivery meeting, says, actually, this was just a motivational exercise to get us to practice coding and teamwork, and didn't really count after all. She won't even bother looking at your work because it was just for your personal development. We're a team.

How do you feel? How about we run that again the next 2 weeks. What are you going to do? Feeling good for your colleague who was about to get in some trouble, but luckily it all turned out ok? Your wife and kid will be glad for that I'm sure.

And aside from all that, my points about the unintended incentives of such a policy remain.


> many people in the world are not happy when their prudent choices are invalidated by a change in the government policy in favor of others who took the opposite choice as you. And that they be called "selfish" for thinking so.

Sorry, but they are called selfish because they are selfish. And, they are part of the reason we can't make any changes for the common good anymore. We can't seem to politically make things easier that were previously difficult. This "I suffered to do X, therefore everyone in the future must suffer to do X" is a toxic, progress-limiting, and quintessentially American point of view. Same logic as "We can't have universal healthcare, because I have been paying so long for my own healthcare!" and "We can't relax immigration policies, because when I immigrated, it was difficult!" and "We can't take care of our poor elderly because I paid my own 401K for decades!"

I paid back over $200K in student loans over more than a decade. I'm glad they're paid, finally. Not having them hanging around my neck is helping me financially get on track. If there is a chance someone younger than me (maybe even my own kids) can go through his or her life without that burden, I am all for it. Their success does not diminish mine.


Here, let's make this more concrete so we're not debating over intangibles.

How much of your salary are you willing to give for this student loan forgiveness program?

$10,000? every year?

Not that much? Why are you being so selfish?


$1.5 trillion is less than what was spent on the Iraq war, and just two years of US military spending. We can make it work without simplistically raising everyone's taxes by $1.5T/everyone. The hardest step is to change people's political priorities so that they actually include making more people better off.

Oh, and to answer your actual question, yes, I'd much rather have $300 of my tax bill every paycheck go towards the "making education free for everyone" fund rather than the "blowing up a kid hiding in a hole with an AK47" fund.


And what if we don't decrease the military spending? Are you happy to pay the extra?

Sure, if we're setting aside reality, and pretending that the only possible way to fund this is with a nation-wide, flat, non-progressive federal income tax increase for the full amount, I'd still be fine with it. Not sure what that adds to the discussion, since that's not even remotely how something like this would actually be paid for.

> How do you feel?

How does that take higher precedence than the literal financial situation of millions of people?

> Your colleague has been a low performer consistently

You are painting a very different picture here. People by and large don't get into unrecoverable student loan debt because they are low performers. Many of them achieve excellent grades. Their work is simply not compensated. So here in your metaphor, you have made a demon out of the victim.

> How about we run that again the next 2 weeks. What are you going to do?

Again, this metaphor has strayed from the reality it is meant to compare to. Student loan forgiveness isn't a perpetual system. It's an N time deal. N increases during the time it takes to overhaul our failed higher education system. Because we are motivated to keep N low, we are motivated to quickly overhaul our failed higher education system.

> Your boss, at the delivery meeting, says, actually, this was just a motivational exercise to get us to practice coding and teamwork

Notice how even in your metaphor, you are victimizing your teammate when it is clearly your boss who is at fault. That part of the metaphor tracts quite well with reality. In reality, you are blaming the student when the universities and stagnant wages are to blame.

> And that they be called "selfish" for thinking so.

Indeed it might be.


How do we feel and how does it matter more than someone's bank account? It starts to, if it determines what we're going to do next, when provided certain incentives and systems in which to behave.

Yes, loan forgiveness isn't a perpetual system (as in my example), for the student receiving it. Obviously. It's perpetual if you do that for every class into the future.

And yes, I said openly in my preface that the picture I'm painting is to illustrate the point of incentives and policies -- not to say at all that student debt holders are underperformers. You miss my point if so.


> It's perpetual if you do that for every class into the future.

In other words, it's perpetual so long as we perpetuate the underlying problem.

So let's solve the underlying problem, too. By instituting Student Loan Forgiveness, we are suddenly motivated to overhaul our higher education system so that it does not demand student debt.


Shelter is even more important and fundamental than education. Will the government be taking care of mortgages next?

That would be great. Maybe they can abolish landlords while they are at it.

Oh, are we meant to be afraid of these solutions?


Well now we can't pass up the opportunity to hear about this. How would that one work? The landlords bit?

Well, you see, landlords are a classic edge case of property rights and unregulated Capitalism.

Capitalism is praised as a motivator for people to contribute to society with the promise of fiscal returns. Landlords make zero contribution, while attaining huge returns.

Abolishing landlords would accomplish one of Marx's most significant goals without completely throwing out property rights and capitalism.

> How would that one work?

Well, like any implementation, that's up for discussion. The general idea is that we would remove the ability for landlords to charge rent. Landlords would have an explicit infringement on their property rights. They would no longer have the right to demand recurring payment from occupants of their properties. They would have restrictions of their ability to evict tenants.

Of course, the implementation is where this idea gets contentious. Are landlords allowed to evict tenants who destroy property? Do landlords even own property anymore, or is it explicitly given to tenants? What about multi-dwelling properties? Who owns the furnace in an apartment complex? Do we create a third-party authority? Can any of this be accomplished without full-fledged Communism?

Most of the complications lie in the change from status quo. It's pretty complicated to decide who owns property that is already owned by landlords, but it's pretty straightforward to make it illegal to enter new rental contracts.

I agree that simply throwing out the words "abolish landlords" trivializes a lot, but it's still an idea worth exploring. What we have now isn't inherently better. It's a pretty obvious failing. People are homeless while homes lie vacant. People are inheriting huge swaths of property, making wealth and power, then turning that power toward policy that benefits them. These are real problems, and they deserve attention.


Sorry if I haven't heard enough of this crazy talk yet to understand it.

You're saying that residential property gets a special restriction on how people who own something are able to use it or enter into agreements on how they can charge others for the use of it?

Who occupies a house then? Only the owner?


> Sorry if I haven't heard enough of this crazy talk yet to understand it.

I get that this proposal is a significant change from the status quo. That's the point. The status quo has some glaring issues. I understand it's difficult to take proposals for big changes seriously, but does that mean we should not take the problems of our current system seriously?

> You're saying that residential property gets a special restriction on how people who own something are able to use it or enter into agreements on how they can charge others for the use of it?

Yes. Specifically, no one can enter an agreement where housing can be rented. The core idea is that housing can be owned and sold, just that it can't be rented. There can be some discussion as to whether short term contracts like hotels could be allowed, but they would have to be regulated to prevent abuse.

The only question left is what to do about extant rental contracts.

> Who occupies a house then? Only the owner?

The owner or a guest. That's how housing works outside renting.

If you can't charge rent on property, then you are incentivized to sell it, thereby flooding the home ownership market and lowering the cost of housing.

This is a concept that has been discussed at length elsewhere. I encourage you not to use me as your only source of education.


So, no one could move to say, a different city, until they found a house they could buy?

I really think you need to think about unintended consequences. Not even unintended -- like, kindergarten 0th order effects.


No one can move to a different city until they can find a house or apartment they can rent. The only significant difference between buying property and renting it is that renters get to exploit tenants.

> I really think you need to think about unintended consequences. Not even unintended -- like, kindergarten 0th order effects.

Like I said, this is a serious idea that has existed for decades, not some trivial thing I pulled out of my ass. Just because it doesn't instantly appeal to you does not mean it is worthless.

I'm not going to sit here and step you through every consideration made on this topic. If you are honestly interested, you can go read about it yourself.

Frankly, your decision to talk down to me like I'm some kind of thoughtless child merely stifles the conversation for both parties. Kindly get off your high horse.


If I appear to talk down to you, it's because by and large people who seriously believe that such an idea is theoretically (not to say even in practice) good (or beneficial) are thinking at a child's level and not responsible for running a society. Fundamentally upending a system that has brought prosperity to generations of people because it has become marginally harder for some today -- that's mature and responsible? Everyone should just share?

Let me guess, on some of the other discussions on HN you would be of the position that people should have the right to repair their mobile phones themselves, control what software runs on their computers, etc. etc? And yet, you would propose interfering with people's most fundamental desire to control and do what they want with the house they own?

Someday, I'm sure you'll realize that it's more productive to work within and guide basic human nature, than to try to put rules down that everyone wants to break.


> If I appear to talk down to you, it's because by and large people who seriously believe that such an idea is theoretically (not to say even in practice) good (or beneficial) are thinking at a child's level and not responsible for running a society.

In other words, if you appear to be talking down to me, it is because you are. I got that.

> Fundamentally upending a system that has brought prosperity to generations of people because it has become marginally harder for some today -- that's mature and responsible? Everyone should just share?

"Fundamentally upending" is your categorization, not mine. What you call, "brought prosperity to generations of people" is what I call, "concentrated wealth into the hands of a tiny tiny fraction of society". That's not a thing I am proud of. I don't call the system that made that happen "mature" or "responsible". The reality of those people "not sharing" has devastating effects for millions of others. Four hundred men's "prosperity" is literally millions' poverty.

> Let me guess, on some of the other discussions on HN you would be of the position that people should have the right to repair their mobile phones themselves, control what software runs on their computers, etc. etc? And yet, you would propose interfering with people's most fundamental desire to control and do what they want with the house they own?

Yes. Abolishing rental contracts for housing in no way conflicts with those other things. In fact, abolishing rental housing contracts would put more people in a position to do what they want with the house they live in.

You see, people predominately do not rent their computers. People in general don't pay half of their income for permission to rent someone else's computer because they can't afford to buy their own. If they did, they would fundamentally not be able to access the right to repair that computer or arbitrarily run whatever software they want on it.

Can your ideologue brain handle it, or does it break too many rules?

Someday you might learn that your current perspective isn't the ultimate best way of thinking ever. Or you won't. The latter is looking more likely at the moment.


Sounds like communism. It has failed in China and USSR when they abolished the landlords. And now they revive landlords and fully embraced capitalism. I guess they did it wrong. We can do it better this time. Make Karl Great Again.

It didn't fail at solving this particular problems, just the authoritarian solution used caused corruption. In fact many of the buildings from that era still stand. It was not the abolition of rent that built them and parceled them out to people.

These two failed though at producing other goods, like food, due to various kinds of mismanagement. Not at housing people or providing employment. Or at basic to middle school education. (Only at higher it did ultimately fail due to anti-intellectualist streak.)


Why not get rid of personal property. Lets start with you.

> Oh, are we meant to be afraid of these solutions?

Not afraid, but how about we spend a non-zero amount of brain power seeing if that is good or not rather than painting opponents as cowardly?

Is asking to think too much to ask?


> Why not get rid of personal property.

Well, that's pretty intense. But as a thought experiment, I suppose we can go all the way down this slippery slope.

> Lets start with you.

Well no, that's not how it works. We start with literally everyone at the same time. That's what Communism means. The fact that you need to change it to make it look unappealing is telling.

Granted, I'm not advocating communism here. I'm just pointing out that landlords are an obvious edge case. Landlords provide no benefit, while reaping a huge reward, especially when you factor in generational wealth.

> Not afraid, but how about we spend a non-zero amount of brain power seeing if that is good or not rather than painting opponents as cowardly?

That's what I'm trying to do here. The comment I was replying to insinuated that we should spend a zero amount of brain power considering Socialist policy.

> Is asking to think too much to ask?


Landlords provide benefits: renting a property means getting somewhere to live without being responsible for major systems if they break. Just because some landlords don't do a great job of maintenance doesn't change the fact that they are legally required to perform a minimum.

In addition, property purchase is legally complex, time-consuming, and risky. If you cannot find someone to purchase the home that you purchased, you can't really get rid of it. Renting thus provides optionality - the choice to walk away. The landlord takes on the risk of not being able to find a renter and having to cover the mortgage and property tax costs for a space they're not using. If you think that'll never happen, take a look at Detroit.

This is not to say that landlords are perfect, or that having them is better than the costs of them. But when you are going around making, in my opinion overly simplistic arguments, you weaken the strength of the underlying case. It makes it hard to take other things you say seriously.


It's called 'moral hazard', and avoiding it is paramount to a functioning capitalist society.

The logical conclusion to your argument is that government should never do anything to help the citizenry unless it benefits every single person. Most people are not vindictive against people who received help.

As an example there were people who lost their jobs during this pandemic and I was lucky enough not to. The people who lost their jobs received an extra 600 dollars on top of their normal unemployment. This benefited society as a whole since jobs were very scarce for certain groups and kept a lot of people from having problems. If I ever lose my job and take unemployment I won't be upset at those people from receiving an extra benefit during this time period and wish they had been made to suffer instead. I'm also not angry at the local government for building a library on the other side of the city that I will almost certainly never go to.

Bringing it back to these scrimping and saving people, most people save money to reduce their loan burden after college. Its a vanishing small number of people who are not rich or receiving large scholarships that pay for college completely out of pocket


Nope, I didn't say that we should not help ever unless it benefits everyone. I'm saying that when you implicitly pick a group to help over others, you'd better be careful about the incentives and signals it gives on what you want to happen next time.

As I said, it would be more reasonable to give everyone a credit, not forgive debt.


But why is it more reasonable to give a credit? The goal is to reduce the amount of people who are putting off major life decisions because they are deep in debt from society forcing them to get an expensive degree. The people who have gotten out from under that burden are no long bringing society down. I don't get a check from the unemployment office after the fact if they ever increase the amount of unemployment people get. Its just a benefit I did not get.

I think the more reasonable thing would be to forgive debt AND find a solution to making sure nobody else has to suffer from crushing debt for education. Make community college free, heavily subsidize people who go to public colleges, etc.


>> from society forcing them to get an expensive degree

I am actually sympathetic to the fact that social pressure or other structural dynamics may encourage people to make bad choices, but they were not “forced”.


> from society forcing them to get an expensive degree.

How does “society” force someone to get an expensive degree?

It is always a choice


This is a pretty unrealistic position. Society also doesn't "force" you to get a job that doesn't make you happy. But speaking realistically, society forces people to do many things without using direct physicality or threats.

Your position is common among "personal responsibility" absolutists, which, like most absolutism, doesn't really work.


> Society also doesn't "force" you to get a job that doesn't make you happy.

1. Absolutely 2. What’s this about a job making you happy?

> But speaking realistically, society forces people to do many things without using direct physicality or threats.

I don’t get this line of thinking. I can come up with compulsory taxation, but you can always move to another society. What has society forced you to do?


Before this gets too out of hand.

1. Nature forces you to eat and have shelter. There's no discussing it.

2. Society does not give you free food or shelter or land to farm and tools to do it, nor means of transportation. (When it does, it's either conditional, or insufficient numbers, or both.)

3. By this you're forced to enter job market to keep alive, which forces you to enter into specific education path.

4. Even where education is free, point 2 holds. Where it's not, you are being subject to an additional whip of capitalism, debt.

5. Migrant jobs have evaporated in many places. As has cheap enough housing. You cannot also save enough to move in most cases, so you cannot even move in practice. If you do so, you're becoming a refugee, which is not a good thing at all. Even more so if you're bound further by different language or culture, or move to especially xenophobic place lured by possibilities.

6. If you have a family, you also need to consider them when moving. If you own property, perhaps inherited, you have to consider what to do with it as well, and you're taking a financial and existential risk. The support network you have (family, friends, connections) will likely not reach to the new area.

7. Enjoying a forced job is like praising your slave master for not beating you too often. Though some jobs have enjoyable elements, these are typically available to elite or lucky few.


What about the fed buying bonds? This has been going on for a long time and the only people who profits from this is people in debt since it keeps the interests down.

This in turn makes other people willing to pay more for whatever person x invested in with the accumulated debt, since debt is cheap and backed by the gov, people today rarely see it is a risk anymore.


> Imagine how you would feel if you were from a family that had scrimped and saved to send you to college, you worked night jobs, etc. Only to find that at the end everyone else who had taken out loans had them forgiven (basically).

An old, old complaint. https://en.wikipedia.org/wiki/Parable_of_the_Workers_in_the_...

‘These who were hired last worked only one hour,’ they said, ‘and you have made them equal to us who have borne the burden of the work and the heat of the day.’ “But he answered one of them, ‘I am not being unfair to you, friend. Didn’t you agree to work for a denarius? Take your pay and go. I want to give the one who was hired last the same as I gave you. Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?’


An old old complaint, yes -- meaning that it diminishes the legitimacy of the complaint and we should have gotten over this schoolchild thinking years ago? Or that it's a fundamental feeling in human beings and we'd better be careful to take it into account?

“warning, haters are gonna hate” is always worth keeping in mind, of course.

then you tell these sorts of stories and hope that people admit that “i got mine so screw you” is a bad way to live.

it does not mean that student loan forgiveness can’t happen, or that societies are somehow forbidden from acting altruistically because people are going to have this feeling. It does mean you need to be ready for it.

For myself, my undergrad degree cost about $250k, and nobody gave me a scholarship, and i am overjoyed if someone else doesn’t have to play that idiotic game.


This is not a proper analogy. The government money comes from taxes, they are not doing charity out of their funds.

if we stop the trolley now, it would be unfair to everyone that has already been crushed

Playing time travel with dire problems at hand is some kind snobbery. There are gradations and people for example being crushed by non-bankruptcy discharageable debt vs some people having their feelings hurt is exactly where epathy is coming in. Those who did well by not having student debt are better that those who ended up in that situation.

> When you pay someone's debts, you assume some participation into the choices they've made

So let's consider the choice to go to college.

When I was growing up, I was told over and over again that if I got an Associates Degree that I would be practically guaranteed to higher wages. I was told that if I got a Bachelor's Degree, I would see higher wages still, and even higher for a Master's, PHD, etc.

Everyone I know has been taught this from an early age. We were taught that if we work hard and better ourselves that we will see a real monetary result. We were taught that that is the American dream. Millions of people believed that message.

That message ended up being a lie. Millions of Americans are now living in debt and can't declare bankruptcy on their student loans.

Don't these people deserve a solution? What was their fault? Working hard to better themselves and society?

> Think to the unintended consequences of what you thought were just good intentions. If your level of logic is "what could be so wrong about helping people get out of hardship", then maybe you shouldn't be in the business of administering / making economic policy...

What are your "good intentions"? Preserving the very unrelenting system of debt that got us here?

If your level of logic is "what might be immoral about helping people get out of hardship", then you are clearly not motivated to help people get out of hardship. Your motivation is instead to apply a strict moral rule over those who are in need.

> Are we only going to do this for current students? Are we going to do this for every student to come? What happens when a person knows that whatever debt they take out will be forgiven?

That's a good question. How long is it going to take to remove this structure of promised benefit leading to inescapable debt? That is how long we ought to remove that burden. That also gives us a clear motivation to overhaul our clearly broken higher education system.

Is your fear that "a person will know that whatever debt they take out will be forgiven", or is it "a debtor will know whatever debt they impose will be forgiven"? We need only replace the word "forgiven" with "recovered", and we see that this is already the system we have in place. People get into student loan debt honestly believing that higher education will lead them to the higher wages needed to pay that debt back. Universities are guaranteed to be paid by students, whether via recoverable debt or not, because bankruptcy is not on the table.

> Think to the unintended consequences of what you thought were just good intentions.

Exactly. If your good intention is to prevent the taxpayer from taking the burden of a broken system, your unintended consequence is millions of people living with unrecoverable debt, and the perpetuation of that same broken system.


A good compromise here would be to allow bankruptcy on student loans. Those who need it can take advtange of that choice, while those for whom student loans provided a significant benefit can continue to pay them back.

Student loans should be discharable in bankruptcy court. It's insane that they aren't already.

Simple solution, anyone in financial trouble gets relief, and people who can pay their debt off should do so. (edit: phrasing)


Hold my beer while I go get in financial trouble.

Bingo... If student loans are forgiven, I’m signing up for aviation school just for the thrill of it.

I don't think you guys realize the loans would dry up for frivolous schooling. The bank would understand you could file for bankruptcy and evaluate the loan accordingly.

Which schooling is frivolous? The GP could really want to be a professional pilot for all the bank knows.

How is it any different than getting into credit card debt or taking out a loan for a Ferrari?

Banks are _supposed_ to evaluate the risk of a loan, not just give it out without consideration.


Federal student loans have a fixed interest rate and therefore cannot be adjusted based on the risk of the borrower to the extent that a credit card or Ferrari loan can.

Private student loans can adjust rates for risk. Should private student loans become increasingly expensive as voters' appetites for federally mandated loan forgiveness increase?


Plenty of loans have a fixed interest rate.

But you have a point that the loan is supposed to have federal backing/protections would make it harder to justify releasing these loans.

But I would argue that predatory pricing against students would negate that.


I didn't mean fixed vs variable rate loans. Sorry for being unclear. I meant that Congress sets the allowed Federal student loan rates.

https://www.forbes.com/sites/robertfarrington/2020/05/12/202...


Opinions like this are why we can't have nice things in the USA. People look at some subgroup getting a benefit and are encouraged to think "Why should they get this thing when I get nothing? These people don't deserve it" and so they block the new benefit, and we fall farther and farther behind countries like the Nordics, where this is somehow not a problem.

This isn't a magic button you can press to costlessly improve some people's lives. It's pure wealth redistribution with recipients disproportionately in the upper middle class.

Do you have a citation to back this up?

I admit my knowledge is anecdotal, but I know somebody in their 20s, who went to college, and is in debt that would be cancelled. This person was the first in their family to go to college, and was unable to find a job in their field. Most of this persons peers are in a similar situation with respect to debt and being unable to find jobs in their field. The jobs these people have are entry-level tech support, bar-tending / waiting tables, starbucks, etc. None of them are upper middle class.


Anecdotally, all of my friends who went to college are clearing 90k a year with many over 200k once you include stock options. One friend is a published expert in their field. Out of all my friends who attended college only one didn't get into a profitable field but their degree was in civil planning and their parents are going to buy them a vineyard to run.

But again, just anecdotal.


This analysis breaks out share of debt by family income and student earning quintiles: https://www.brookings.edu/blog/up-front/2019/06/28/who-owes-...

Their sources are also linked from that post.

Going by student earnings, the top 40% of earners owe almost 60% of the debt. Going by family incomes has about the same distribution. None of the lower three quintiles are breaking ~15% of borrowing.

This is absolutely a gift to the wealthy.


> > the top 40% of earners owe almost 60% of the debt.

> This is absolutely a gift to the wealthy.

I think you need to look up the definition of "absolute". You left out 60% of your whole.


hyperbole notwithstanding, the greatest share of the debt is owed by the minority who has the greatest ability to pay. That's the salient point. The lower earning majority has lower debt on a per-capita and aggregated basis.

This is certainly a benefit disproportionately for high earners from wealthy backgrounds.


God forbid the rich get richer.

Meanwhile, the 60% of people you didn't mention - the ones with only 40% of debt owed - are in a crisis.

You are saying that we must deny those people assistance, because we would also end up helping others who aren't in crisis, and doing so is unpalatable.

So where is the solution for the people in crisis?


God forbid that the rich be asked to pay anything at all for this incredible and unnecessary gift the people give them? What would make more sense would be targeted debt relief indexed on familial wealth, student earnings, and the institution's median outcome for the given degree program.

Is there any room for accountability, or is the indiscriminate dumping of money out of a helicopter the only solution we're allowed to consider?


Go right ahead and consider, and even promote, another option.

That's not what I have been seeing here. What I have been seeing is promotion of doing nothing at all, simply because the option being presented isn't perfect.


Those people are right.

The data does not support the idea that student debt should be a top priority for anyone trying to maximize the impact of raining dollars onto the public. I'm presenting data not for the purpose of showing that there's a better way to distribute loan relief, but to show how incredible it is to claim this is motivated by desire to give relief to needy people (and therefore given top priority)

It's decidedly not the needy who'd receive the most relief from this policy.


> It's decidedly not the needy who'd receive the most relief from this policy.

That was never the claim. Student loan forgiveness is not universal basic income, medicare, food stamps, etc. It is not designed to overcome poverty. That's a totally separate problem that needs attention.

Are you saying you expect every tax dollar to go to the poor first? Clearly you aren't basing your expectations on the status quo: We spend $700 billion on defense, and $350 billion on welfare (not including medicaid).

Just because there are more important problems to solve does not mean we should ignore this one.


Yes, because there are more important problems to solve does mean we should ignore this one. That's literally the point of prioritizing - budgeting is based on recognizing that there are limits to reality - limits to how much money we can invent or tax without destroying our economy. You seem to think that we should get this for free, but it has to come from somewhere, and we're already facing an extraordinarily expensive pandemic, plus the West seems to keep burning and getting more expensive every year, hurricane season is doing more damage every year, we have more and more places where we can't maintain infrastructure, and, well, the list could go on.

My claim is that "people have student debt" is not one of societies issues. That some people have debt may be, but the question there is, who these people are and whether their educations are performing for them, not simply that the debt exists.

Focusing on the debt is a red herring that conveniently rewards elites and others who are doing just fine. Focusing on whether universities are actually doing what they claim on the box is the real issue -- again conveniently elided by a blanket debt forgiveness program.


Focusing on the benefit to elites is a red herring that conveniently ignores the poor/middle-class, who are in need.

Focusing on universities is a closely related, but separate issue. It does need to be tackled, but that does not change the existing situation of the current victims.

My entire point is that student loan forgiveness shouldn't be discounted out-of-hand simply because it doesn't fix everything or that it benefits some people you don't want to benefit.


Plus - forgiving student loan debt, or, worse, Free College for All, would only incentivize colleges making college more expensive. College is already too expensive - it's literally ten times more expensive than it was 50 years ago, for no greater benefit. We need to find solutions that drive down the cost of things that we want people to have, not solutions to help us spend more of our money on them.

> Do you have a citation to back this up?

Honestly, the side proposing a large action should also be ready with relevant research.


"Opinions like this are why we can't have nice things in the USA. People look at some subgroup getting a benefit and are encouraged to think "Why should they get this thing when I get nothing? These people don't deserve it""

That is the price of diversity.

Diversity, which is neither bad nor good, has benefits and costs.

My very diverse country invented jazz music and snowboarding and the Internet. We also lack the social trust and cohesion of much less diverse countries like Japan or the Scandinavian countries at whose social welfare programs we marvel.

Personally, I'll take the jazz music and snowboarding even if it means fighting over what should be basic components of the welfare state.


So eliminating poverty would eliminate diversity?

Nonsense.


I'm not sure who you are responding to here - I said nothing like that.

> That is the price of diversity.

> We also lack the social trust and cohesion of much less diverse countries like Japan or the Scandinavian countries at whose social welfare programs we marvel.

> Personally, I'll take the jazz music and snowboarding even if it means fighting over what should be basic components of the welfare state.

So what I took you to be saying is that "jazz music and snowboarding" come from a diversity present because of the lack of social programs like welfare. What "diversity" is that if not that which includes poverty?

What I'm trying to say is that it's ridiculous to assert that "jazz music and snowboarding" come from the lack of a welfare state. Nowhere do you illustrate how we can't have both.


The government’s money all comes from taxes. If the government pays out money to people that aren’t you, it’s as if you had paid them directly and skipped paying taxes. If you wouldn’t want to give someone free money then you similarly shouldn’t want your government to give them that money.

This is true, but misses the main point for how to determine whether the government providing money is better than not: positive externalities.

As an example, we all benefit hugely from the existence of an EMS (911, ambulances, emergency rooms) system, even if most of us don't use it much. That's a positive externality that's worth the government making sure happens, as it wouldn't necessarily happen without government involvement.

Similarly, public schooling (or publicly paid school) provides externalities: a literate society, a basic level of civic and cultural knowledge that people can assume as a baseline, opportunities for social mobility. None of those exist with a voluntary system.

This proposal doesn't seem to pass that test: at least, nobody has proposed positive externalities that come out of this.


Not really true. The government adds coordinated action and scale in situations where individual action is ineffective. Also, there are a lot of issues about which I simply don't have enough knowledge to have an opinion.

Maybe, but in this case we're literally talking about moving tax money directly into people's student loan accounts. I'd say, "yes, really true."

Your logic being that any time we give money or subsidize some group, it must be good?

The logic is that when you give money or subsidize some group, then that is not _necessarily_ bad. Maybe it really is bad, but the fact that it involves giving money to a specific group is not enough to conclude that.

But the true logic of American government and finance is that if something is good you tax and regulate into the ground, until you’re then forced to subsidize it. The often-attributed quote to Reagan sounds globe but it makes a lot of sense.

We should be throwing more responsibility at the system, not money.


> But the true logic of American government...Reagan.

Reaganomics isn't "the true logic of American government". Reagan's administration ended in 1990.

> We should be throwing more responsibility at the system, not money.

That's a false dichotomy. We can do both.


I honestly think that we need to stop thinking about "subsidize some group". The more effort we spend making sure that somebody doesn't get something they don't deserve, the worse off we are. Let's just have a UBI rather than lots of bureaucracy keeping score.

I'm strong pro-UBI, strongly against student-loan forgiveness.

It's one thing to acknowledge automation is going to decrease the job pool. It's another to retroactively break financial contracts for a generation that's already not responsible enough with money, giving a huge amount to a small-interest group and ignore those who need it most (i.e. those who didn't go to college).;

It also strongly incentivizes colleges, which need to die, and disincentivizes colleges reducing prices to what they were a generation ago.


Even though student payments went largely to administrators? That this didn't used to be the case? That students (of every economic class) paid rich white dudes to sit in offices and pretend to run a college?

How is forgiving this loan anything but relief to young people who were essentially stuck either being that low-income group you are so fond of, or paying through the nose?


College used to be so cheap, you could pay your way through it working nights as you attended classes during the day. I have family who did this. In that world, there's no such thing as student loan forgiveness, because it's not a crippling debt.

The root of the problem is that college got 3x as expensive (after accounting for inflation), and not better at educating. Fundamentally, this is an economics problem. And the lesson here is that people need to stop trying to gamble >$100,000 on class indicators.

It's tremendously damaging to the economy if we deny reality and say "Let's keep encouraging 18 year olds to study British Literature for 4-8 years," versus "That's dead, it's all technical now. Sorry, but here are your realistic choices..."

https://educationdata.org/average-cost-of-college


You don't get out of a loan because you don't like the skin color or wealth class of the receiving party. Should we forgive mortgages because the payments go to bankers?

Many of us did pay off our loans or took less loans then we could have and we did that knowing loans are to be paid back.


Well, that's a good point. The BUI addresses that. The money men have learned to skim off of every transaction, which inevitably ends up with them having all the money. This is a new thing too.

It's very moral and hardworking of us older folks who lived in a different time and paying loans didn't take half a lifetime. But this whole conversation is about how that world is gone, and young people (in America) are behind the 8-ball.


I agree that UBI is a better solution.

Is UBI on the table, though? Are we really looking at the choice between UBI, Student Loan Forgiveness, or both?

All I am seeing is the dream of either, and the reality of neither.

Right-wing conservatives - informed here by Murdoch press - are obsessed with defending the "neither" option, because anything else is evil Socialism.


I think there's more potential to convince the right wing and the center of UBI than student loan forgiveness. Certainly I think we're making a better society if we are able to do so. The problem with the UBI is that a livable UBI is too expensive for us to afford right now - even at 11k, it's much bigger than the entire US federal discretionary budget. A much smaller UBI that grows with time, though, maybe.

> I think there's more potential to convince the right wing and the center of UBI than student loan forgiveness.

> The problem with the UBI is that a livable UBI is too expensive for us to afford right now

Those two statements contradict each other.


Because collection and redistribution of wealth and assets has never worked anywhere in the world, ever. Any plan to dress it up as “debt forgiveness” is easily shredded for its narrow view that it’s a one and done, when this could be like tolls: Once in place they never go away.

You're making a realllyyy strong claim here, and also an unclear one. Redistribution hasn't worked... worked to achieve what end goal? I would be interested to hear what you think wealth redistribution has failed to do, and also to hear one or even two examples of societies that do not redistribute wealth in any meaningful way (I have trouble imagining how that could ever be the case, to be honest).

I think that redistributing wealth is essential to having a functional society (where I define functioning as being moderately stable and in some meaningful way reducing the suffering of those who live within it).


Redistributing wealth is literally what powers civilization :)

And, if you do it right over the long time you create more wealth, more specialization, more complexity...

Now if you overdo it that is really bad... but I look at inequality right now and wonder if I should start up a guillotine shop.


If your premise is true, then the most redistributive governments would be the most civilized.

20th century communism would not provide a lot of evidence in favor of that theory.


> the most redistributive governments would be the most civilized.

They (the mixed economies of the West and, even within that set, those with the most redistribution and strongest social safety nets) are.

> 20th century communism would not provide a lot of evidence in favor of that theory.

20th Century Communist regimes (Leninism and it's descendants) wasn't redistributive on an ongoing basis, it was simply a one-time transfer of effective power over the entire economy from one narrow elite to another, hence why non-Leninist Marxists often referred to it as “state capitalism”.


No, I did not say how much, it is like anything, not too little, not too much.

Communism is way way too much, and ignores fundamental aspects of humanity.


I've got mixed opinions on this one––I feel like we often wrongly conflate "the elite" and "those with a college degree". The real losers if we cancel student loan debt is probably decamillionaires+ due to taxes.

That said, I'm not in favor of immediate student loan cancellation. I think we need a sustainable solution to prevent a rebuild-up of student loans first, and I think we also need to aim to implement the same solutions for those in trade school for the same reason the author mentions. If we're in favor of public funding for secondary schools, why not post-secondary where folks actually tend to learn to critically think and learn their skills for the job market?


It's a hard problem. People who incur a lot of student debt are basically a random mixture of "students at actual elite colleges", "non-traditional students at for-profit colleges of wildly variable quality" and "people who incurred debt to get their MBA or other professional degrees". It makes no sense to treat all of these people equally wrt. debt forgiveness, and no they aren't just "the elite" either.

I think we all lose, if we do decide to pay for this entirely through taxing the rich. We (further) lose social trust between the rich and the rest of us, and we (further) lose the sense that we're all in this together, and we encourage ourselves to further think about how we can get those people over there to pay for our stuff over here.

To be clear, yes, please, tax the rich. But do so with a progressive taxation that we all pay into, so we all share the cost to the best of our ability.


I think the most reasonable thing to do would be to cancel student debts and to then make college affordable again.

When I went to a NY State SUNY school in the late 80s / early 90s, it was heavily supported by the taxpayers of NY. My tuition was $675 a semester, or $1350/year and the fees were minimal. The NY minimum wage at the time was $3.35/hr. That meant that by working a minimum wage job for the summer, I could pay my tuition and fees for the next academic year, and by working part time during the semester, I could pay for rent and food. Thanks to this, I graduated debt free.

We need to get back to this level of affordability.


Change bankruptcy law so student debt is discharge. Don’t let government back loans.

Lenders will only lend to people have a decent chance of paying it back.

So no more nonsense degrees unless your rich.

Colleges have grown fat on easy money. This will slim them up again


They could also just move all college loans to Fed interest rates of near 0%.

I think everyone who has taken a loan out should pay SOMETHING - a settlement sum perhaps, based on their last year tax return. IE. The government will forgive 80% of your loan, but you must pay the remaining 20% on an affordable, no interest payment plan. Failure to pay that your only option is to declare bankruptcy and have it discharged. I have a real problem with anyone getting off totally free.

Variations of bankruptcies require paying.

If have some income it tends to be a sliding scale. Chapter 13.

You have to be very broke to get everything wiped off. Chapter 7


This is how bankruptcy works.

>I think the most reasonable thing to do would be to cancel student debts and to then make college affordable again.

We need to do this the other way around. But yeah, college (and trade schools) are an investment in the people of our country. I sure as hell would rather pay higher taxes and live with well-educated citizens who can create things and start their own businesses than be absurdly rich.


> We need to do this the other way around.

Why does it matter what order these are done?


Paying it off now doesn't fix the problem––it's a bandaid.

Doing one doesn't accomplish the other.

So again I ask, why does the order matter?


Not the original poster, but for me, because our political system is broken and we can never seem to do the hard part, so we shouldn't do the part that makes the system worse unless we can do the hard part that makes it better first.

Cancelling student debt is an example of a moral hazard: https://en.wikipedia.org/wiki/Moral_hazard It sets a bad precedent and merely encourages other people to borrow money in the future, but does not solve the underlying issue of college costs. It also subsidizes unemployable degrees.

Promises to wholesale cancel student debt is populism. More specifically, it is left-wing economic populism that panders to the young upper-middle class for their votes. (Interestingly, Federalist Papers Number 10 predicts populist demands to cancel debts 200 years ago.) It's worth noting that Biden's plan, which cancels debt for people below a certain income, is somewhat more reasonable.

However, I do think that college expenses are a real issue. Education is important in society, and college is also a way for lower-class people to move up the economic ladder. Precisely because people can borrow money, colleges are free to charge exorbitant prices. Colleges then expand with amenities and market a lifestyle rather than a place to learn. They also expand with administrative bloat. I think colleges should be held accountable for their rising prices and where the money is going.

P.S. Jonah Goldberg has more writings here: https://thedispatch.com/people/4350832


The problem is our political system has stopped trying to solve issues or evolve.

I agree with you, but at this point we are just applying as many band aid fixes as we can until it really burns down or a political evolution happens.


The real elites, the ones going to top 20 schools, don't even have student loans because the endowments pay for financial aid grants. Those financial aid programs are amazing, but I always did find it a bit unfair that the kids at the best schools are the same people getting the highest paying jobs that would be able to pay off loans if they had them.

There's nothing wrong with that system, it's great for the people it benefits, but just a bit sad is all.


Any debt forgiveness in the first world is essentially a transfer of wealth, and it forgives everyone who very well could have paid, but hung out to get it forgiven. I took out a loan and it took me years to pay it off, why can’t others do the same.

Depends on when you took your loan and what the cost of tuition was then, but this is really about reversing the insane inflation that only came about as a result of the loans in the first place.

What inflation are you referring to.

Inflation in the total cost of a post-secondary degree.

Wouldn't student loan forgiveness only put more fire on that inflation?

In my opinion, a more equitable solution is to simply give everyone who took out a student loan a fixed amount of several tens of thousands of dollars. If you paid off your loans already, great, your reward is free money.

What about those who worked hard and took a few more years to not take out a loan in the first place?

Good for you :)! I paid off my loans through a combination of hard work and luck. I'd love to say it was all me, but it wasn't, I had great role models, I am lucky enough to be born into a country with amazing infrastructure, and many other reasons that have very little to do with me...

My question for you is do you want a stronger country?

Or, just a stronger you?

As a country are we just a bunch of people out for themselves, or are we a community?

I am a firm believer that the more Americans who are doing well in life, the better off we all are. The more Americans who are secure financially the better off we all are. The more Americans who can afford additional services and products the better off we all are. The more Americans who have a little bit of financial freedom to start a company and create jobs for other Americans the better off we all are. Repeat, repeat, repeat.

A little selfishness is good, but too much and everyone starts to view everyone as competition and "success" as a zero sum game. I want the kid down the street from me to be doing as well as my kid.

What do you think?


After a few days, I'm even against it for the reason you used as a pro. If people learn personal responsibility isn't rewarded then they will aggressively spend all their money now counting on rainy day funds. Which is fine until nobody has saved and there isn't enough and everyone loses.

If Biden wants to solve the problem (and he should), then he needs to address why college tuition has been going up at much faster than inflation for years. Professors are not making any more (perhaps less, if non tenure track professors are more of them?). Government is spending less, but not that much less. So where is the money going that causes tuition to go so high. I don't have answers, that is a hard problem, but it needs to ben confronted. There is no reason why a class of 20 working fast food wages cannot with careful living pay a professor their wages as a part time student. The math works out, so why is tuition so high?


I would put forward the following...

Teaching personal responsibility is like parenting, it is about the thousands of actions and needing to get it right ~70% of the time. And, that mostly relies on parents, role models, and culture.

The government forgiving debt one time isn't going to cause to hurt personal responsibility. It is a small gift to try to fix a system that is super broken. And, it might be the only thing politically possible at this time (which sucks).

When I graduated I had ~$40k in debt, if $10k of that would have been forgiven I would have cried because it would have helped me so much. It also wouldn't have changed the incredible lengths I went to paying that off as fast as possible. It also wouldn't have caused me to make more financial mistakes during school that got me to that point. I did as well as I could have with my 17 to 23 year old lizard brain.

IMO I think it is a stupid move, because like you said it is unlikely to fix a broken system. I'd rather we spend the money to boost unemployment or give everyone making under $25k a year a lump sum. Both those would have a better effect on the short term economy to coast us through the current situation...


If you had given me 10k when I graduated it would have helped me a lot too. Are you going to give every college graduate 10k?

Me? No I don't have that much money :)

I'd love for my tax dollars to go to help people be better off financially because that is good for society/country/economy. I'd love for my tax dollars to go toward the IRS as they are super understaffed. I'd love for my tax dollars to go toward subsidizing college and getting costs lower. I'd love for my tax dollars to go toward helping people who are unemployed.

Do you get mad that you pay into car insurance and never crash?

Gov = insurance, just because you don't use every program isn't a bad thing. If your kid needs it one day it will be for them.

I just don't get this super selfish thing. I want a stronger culture/society/economy/country.


Problems is in this country the Republicans belive the nature of government is incompetent and so they cut it. Democrats believe that government is competent at whatever and doesn't care about waste. Either way you lose giving government more as nobody is ensuring that money doesn't go to waste.

ya, although i think democrats should get more credit for waste cutting. There is a tendency to equivocate when in fact republicans have gone uber extreme, where as democrats are merely competent.

Money going directly to people is good.


When I saw my peers out drinking and such, I'm not convinced that paying off their debt make the country stronger.

The more equitable solution would be to give out money even if you never had a loan. Why should I have to pay for your student loan. I never had a loan to begin with.

If you want a middle class, subsidise middle class things. Maybe that means some upper limit per person to the subsidy education program, but it does mean subsidising education.

I would expect nothing less from Murdoch press.

> Think about it this way: If you only have $1.5 trillion to spend, what policy would help the most people actually struggling right now? I don’t think canceling student loans would rank in the top 20.

Do these people even have a top 20? What does it include apart from lowering the corporate tax rate in hopes that money will "trickle down" to the poor?

Meanwhile outside the right-wing echo chamber, cancelling student loan debt is very appealing to millions of average people who got into unrecoverable debt by simply trying to better themselves because they believed in the promise of better wages for better education. These people are in debt, making them literally not "the elite".

So what elite are we talking about? Universities? OK, well what other options do we have? Leave students and alumni in unrecoverable debt so that those damn "elites" lose money? Is there a way to eliminate that debt without paying Universities what they are owed? I'm all ears.

And what is our long term solution? Are we going to stop telling children they will make millions more on average by simply having a bachelors degree? Are we going to make it clear to every prospective student today that going into student loan debt is an unwise risk and not a strong investment?

Right-wing conservatives are happy to tell people they deserve the debt they got into, but are too chicken to confront their original motivations. People are desperate to get higher wages, but on the whole, wages have been stagnant since the 70's. The source of this problem is clear when you look at the big picture: billionaires are getting the overwhelming majority of new wealth while the rest of us are left to fight over anything that "trickles down".


Free public libraries? Paid for by tax dollars? That's making the working class subsidize the elite.

Free public roads? Paid for by tax dollars? That's making the working class subsidize the elite.

Etc.


This is not analogous at all.

Everyone uses roads. Everyone has access to public libraries.


I meant my comment to point out how people would argue against public roads and against public libraries if we didn't have them.

But let's assume I was making a direct argument.

There are different levels of road use.

There are people who can't afford a car. They might use the road to bicycle or walk. (Though those roads may be cyclist and pedestrian un-friendly and even antagonistic.) They certainly don't need the same level of built-up road that an SUV or truck owner needs. But they pay the same taxes for it as rich people do, and are far more likely to be arrested for the discriminatory crime of "jaywalking".

Even setting that aside, poor neighborhoods subsidize the roads and other city services rich people use. - https://www.strongtowns.org/journal/2017/1/10/poor-neighborh...

How's that not making the working class subsidize the roads of the elite? And if that's a problem, what should change?


> Everyone has access to public libraries.

I live in a historically poorer (and very densely populated) part of NYC, and this isn’t true: the NYPL’s branches are disproportionately present in more affluent areas. Those areas also tend to have larger libraries and more auxiliary library services (like computer and printer access).


And one third of American young people have/are getting a degree. That isn't enough to make it analogous?

If we want government to pay for college then we need to have government treat it as it does Medicare and such. Assign dollar amounts to each course and course hour with a set amount per degree. Oh there will be gnashing of teeth of that I am sure but you can damn well bet colleges, and good ones at that, will create the programs by which they can rest assured of steady pay.

Now this may end leaving some degrees and courses by the wayside and this is a correct outcome.

Finally we should rethink how we treat endowments and tax breaks many colleges, private or public, receive. Many of the same receive very large property and other tax breaks which then fall upon the communities they are based in to make up by taxing the public.




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