Student Loan Cancellation Debate

[bjcheung77]

Ouch! Just wow! - “10 [million] borrowers won't even have loan service providers at the end of the year,”

Just two companies - "Granite State and FedLoan Servicing collectively handle at least 10 million student loan borrower accounts — around 25% of the Department of Education’s portfolio."

Interesting set of events, these two companies just blew it!  This hurts!  I wonder how many others will follow suit if they do follow...

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And the link: https://www.forbes.com/sites/adamminsky/...sruptions/

[dfrecore]

It's like mortgage service providers - if one stops, there's someone else to take their place. Whatevs.

[jch]

I'm against simply cancelling outstanding debt, because I believe that doing so will allow the responsible entities to get away with their misdeeds. Any debt reform needs to address the underlying factors that caused this mess in the first place. If the problems aren't fixed, we'll quickly be back in the same hole.
Essentially, too many students are spending too much money on college. They're racking up balances that they will never realistically pay back. First, more students should be steered towards skilled trades and apprenticeships. Those career paths can generate substantial incomes without massive loans. College isn't the right path for everyone, although some in our society continue to say it is. Second, universities need to slash costs. There's no good reason why gen ed classes at a major school should cost five times what the same classes do at community and technical colleges. Third, utilization of lower-cost credit earning methods needs to increase. Those of us on degreeforum are familiar with many ways to complete cheap credits, but these are foreign concepts to much of the outside world. Fourth, schools should not allow their students to put themselves in a hole. Greater accountability needs to be placed on institutions for student outcomes. If graduates of a program can't find relevant and worthwhile work, that program must be altered or eliminated.
Finally, once the above reforms are implemented, student debt cancellation can be considered.

[ashkir]

I agree with the 10k cancelation. But I don't know how I feel about the 50k. I think it is a great idea for a stimulus package. Some states had made great stride to better upper education access. We need to probably expand the Pell Grant program. The lower-middle class is in an awkward position where they make too much for the grant but too little to actually afford college.

[ctcarl]

I agree with the 10k cancelation. But I don't know how I feel about the 50k. I think it is a great idea for a stimulus package. Some states had made great stride to better upper education access. We need to probably expand the Pell Grant program. The lower-middle class is in an awkward position where they make too much for the grant but too little to actually afford college.

How would that work in terms of folks who recently paid off student loans?  

Plenty of them struggled and scrimped to pay off their debt.  Some delayed marriage and kids, worked multiple jobs, skipped buying a home and/or made other sacrifices in the interest of financial responsibility.  Would they get $10,000 back?

[jch]

How would that work in terms of folks who recently paid off student loans? 

Plenty of them struggled and scrimped to pay off their debt.  Some delayed marriage and kids, worked multiple jobs, skipped buying a home and/or made other sacrifices in the interest of financial responsibility.  Would they get $10,000 back?

This is exactly why I'm against cancellation. People who acted responsibly, saved, scrimped, and sacrificed will get minimal or no benefit. Meanwhile the students and schools racking up debt get bailed out. It's an incentive for financial irresponsibility.

[TINASAM]

I agree with the 10k cancelation. But I don't know how I feel about the 50k. I think it is a great idea for a stimulus package. Some states had made great stride to better upper education access. We need to probably expand the Pell Grant program. The lower-middle class is in an awkward position where they make too much for the grant but too little to actually afford college.

How would that work in terms of folks who recently paid off student loans?  

Plenty of them struggled and scrimped to pay off their debt.  Some delayed marriage and kids, worked multiple jobs, skipped buying a home and/or made other sacrifices in the interest of financial responsibility.  Would they get $10,000 back?

This is like "I had cancer and had to endure that and beat it to survive" after a cancer cure. Just because you struggled doesn't mean you should want everyone to struggle. If you paid it off, great, you were one of the ones that didn't get eat up by the system. Reducing student debt can make a tremendous difference for a lot of people.
The world is suppose to want to improve things for the next generation, not be pissed that they're not suffering as much as the generation before it.

[ctcarl]

I agree with the 10k cancelation. But I don't know how I feel about the 50k. I think it is a great idea for a stimulus package. Some states had made great stride to better upper education access. We need to probably expand the Pell Grant program. The lower-middle class is in an awkward position where they make too much for the grant but too little to actually afford college.

How would that work in terms of folks who recently paid off student loans?  

Plenty of them struggled and scrimped to pay off their debt.  Some delayed marriage and kids, worked multiple jobs, skipped buying a home and/or made other sacrifices in the interest of financial responsibility.  Would they get $10,000 back?

This is like "I had cancer and had to endure that and beat it to survive" after a cancer cure. Just because you struggled doesn't mean you should want everyone to struggle. If you paid it off, great, you were one of the ones that didn't get eat up by the system. Reducing student debt can make a tremendous difference for a lot of people.
The world is suppose to want to improve things for the next generation, not be pissed that they're not suffering as much as the generation before it.

So you think that when a cure for cancer is found, previous cancer survivors will be...pissed?  Where did this notion come from?  Do you know any cancer survivors who have expressed these thoughts?  "They better not come out with a cure!  In my day, we had to endure cancer, and beat it!"

Just curious, how do you feel about people who have never had student loans, but have other financial struggles?  Should we forgive loans for college students, but not provide similar financial relief to the majority of the population who are dealing with economic hardship?  How about credit card debt, which impacts many millions of Americans at much higher interest rates?  Wouldn't reducing credit card debt make a tremendous difference for a lot of people?

If that's the goal, why not forgive medical debt?  For that matter, mortgage debt is the biggest chunk of consumer debt out there.  If the goal is to make a tremendous difference for a lot of people, maybe we should forgive mortgage debt.

[dfrecore]

I agree with the 10k cancelation. But I don't know how I feel about the 50k. I think it is a great idea for a stimulus package. Some states had made great stride to better upper education access. We need to probably expand the Pell Grant program. The lower-middle class is in an awkward position where they make too much for the grant but too little to actually afford college.

How would that work in terms of folks who recently paid off student loans?  

Plenty of them struggled and scrimped to pay off their debt.  Some delayed marriage and kids, worked multiple jobs, skipped buying a home and/or made other sacrifices in the interest of financial responsibility.  Would they get $10,000 back?

This is like "I had cancer and had to endure that and beat it to survive" after a cancer cure. Just because you struggled doesn't mean you should want everyone to struggle. If you paid it off, great, you were one of the ones that didn't get eat up by the system. Reducing student debt can make a tremendous difference for a lot of people.
The world is suppose to want to improve things for the next generation, not be pissed that they're not suffering as much as the generation before it.

This isn't ANYTHING like that.  This is "we're screwing over everyone who didn't make bad choices"; coming out with a cure for cancer is just luck, it's not done on purpose.

[jch]

The ongoing forbearance and rumors of cancellation is prompting me to reconsider my own financial planning. Previously, I rejected my loan awards for the 2021-22 year and elected to pay whatever wasn't covered by aid & scholarships. However, as long as interest isn't accruing (or rather is being subsidized by Uncle Sam), it would make sense for me to put off paying as long as possible. If the progressives do get forgiveness passed, those Federal loan balances could even get wiped out. Also, I could use some more tradelines on my credit report. Altogether, the current student loan atmosphere is making taking on unnecessary loans seem like a responsible option.
Does anyone have experience going back to TESU and asking to use previously rejected loans? I did fill out my MPN, ASLA, and counseling a while ago for the 2021-22 year just in case.