Student loan forgiveness

[LivingAlmostLarge]

What do you think about student loan forgiveness? I am actually against it. I think it doesn't help those with the most need. Instead it helps families able to go to college. I'd prefer to see the government subsidize student loans but allowing everyone to refinance their student loans private and public with the federal government for say 1-2%. I'd also like to see the loan forgiveness instead turn into pell grants and expand the qualificaitons like give it out to more families in need. I'd also rather subsidized 2 year colleges or trade schools for free rather than forgiving student loans. And I'd like to expand the student loan forgiveness for working in federal jobs or underprivilege areas. Make it easier to qualify.

I don't think wiping out $10k or $50k is the answer. The only people able to afford $50k are probably people from upper middle class families who overspent their entire lives and then they borrowed to go to college. I think we need to address the problem for the lower income families who often start and don't finish college. Or who only go for 2 years associates degrees. Maybe I'm wrong but it doesn't seem to be solving the bigger problem of student loans and the high interest and the insane borrowing that occurs.

We need to also reform for-profit schools.

[kork13]

What do you think about student loan forgiveness? I am actually against it. I think it doesn't help those with the most need. Instead it helps families able to go to college. I'd prefer to see the government subsidize student loans but allowing everyone to refinance their student loans private and public with the federal government for say 1-2%. I'd also like to see the loan forgiveness instead turn into pell grants and expand the qualificaitons like give it out to more families in need. I'd also rather subsidized 2 year colleges or trade schools for free rather than forgiving student loans. And I'd like to expand the student loan forgiveness for working in federal jobs or underprivilege areas. Make it easier to qualify.

I don't think wiping out $10k or $50k is the answer. The only people able to afford $50k are probably people from upper middle class families who overspent their entire lives and then they borrowed to go to college. I think we need to address the problem for the lower income families who often start and don't finish college. Or who only go for 2 years associates degrees. Maybe I'm wrong but it doesn't seem to be solving the bigger problem of student loans and the high interest and the insane borrowing that occurs.

We need to also reform for-profit schools.

I agree with you almost entirely. The federal student loan program is not a blessing when it's leading people (directly and indirectly, by way of implicitly encouraging private, often more costly, loans when you max out the federal loans) with tens (or hundreds) of thousands of dollars in debt, at a time in most people's lives that most are probably still unemployed or earning around minimum wage. The program needs to end.

How to help people go to college instead? You offer done good options. Targeted grants, subsidized/free community college/trade schools, ... I'd even consider enforcing tuition cap limits for schools receiving state/federal aid. I can't outline all of the right answers, but status quo is definitely not working.

[riverwed070707]

I also do not agree with SL forgiveness. While it tends to be a somewhat unpopular opinion, I think it undermines students who borrowed responsibly and worked their way through college to graduate with minimal debt. I do think college tuition continues to rise at an unsustainable rate and would fully support any initiatives to make it more affordable going forward. To me, wiping out SL debt wouldn't do any more for students who over borrowed than wiping out the mortgages of people who bought more house than they could afford... they're just going to go out an over borrow on the next shiny new object they can get for a monthly payment.

[disneysteve]

I'm not necessarily completely opposed to it but I'm not sure that it accomplishes what it is meant to. I think the point is to attract grads to work in under-served areas. The problem is they go to those areas, work the minimum contracted time to get the loans forgiven, and then leave to work somewhere where they can get paid market rates and get out of dangerous and otherwise undesirable areas. So it's a never-ending cycle of having to bring in new people.

I do think the Federal student loan limits need to be increased. They haven't kept up with the cost of attending college. A first-year undergrad can only borrow $5,500. That's not enough for many people to be able to afford even a state college so they end up turning to private loans that carry far worse terms.

We also need to reform the entire college machine to lower costs. Colleges have become elite country clubs with facilities that rival luxury resorts around the world and the prices reflect that. And it's a never-ending competition to attract students so any school that doesn't play the game loses ground, so they all constantly upgrade and update and expand their offerings.

[bjl584]

I think that the whole Student Loan process needs a serious revamp.
I don't agree with the government or private lenders extending tens of thousands of dollars of credit to 18 year old kids who don't have a clue about what they want to do with their life.
These lenders are happily writing loans for these kids who are signing up for majors that have zero marketability.
The fact that colleges even offer these majors is another story.

[Fishindude77]

Need to quit pushing the idea that everyone needs to go to college, and need to do a better job getting kids ready to go to work when high school is over, and even going to work during high school.

If the government would keep their noses out of the student loan mess, and leave it to private banking to decide who gets to borrow money for college, you would have a lot tighter underwriting standards and a whole lot less kids borrowing this money and getting themselves into trouble.

Forgiving student loans would be a disaster. If they forgave all the students currently in debt, then it's only fair to reimburse all who have already paid for college the amounts they spent.

[disneysteve]

If the government would keep their noses out of the student loan mess, and leave it to private banking to decide who gets to borrow money for college, you would have a lot tighter underwriting standards and a whole lot less kids borrowing this money and getting themselves into trouble.

It's the private banking that is by far the biggest problem, though. The lending limits for Federal loans are quite low as I said above. Freshman can only borrow $5,500. That's nothing. For 4 years, the maximum total is $27,000. That's not the problem at all. Nearly everyone who finishes 4 years of school should be able to manage the payments on a 27K debt even if they go into a relatively low-paying field. The big problem is the private loans. They will lend you as much as you want. It's insane.

[disneysteve]

What do you think about student loan forgiveness?

I just realized I may have answered a different question than you were actually asking. Do you mean loan forgiveness programs like for a teacher taking a job in the inner city or a doctor going to practice in a rural area? Or were you talking about widespread loan forgiveness like some politicians have suggested (I think Bernie Sanders may have been the one pushing for that but I might be wrong).

[ua_guy]

I am for a part of it.

Specifically, the part where students take out loans for certain types of for-profit colleges and trade schools, the college/school goes out of business or loses accreditation. Those loans should be forgiven. It leaves students who applied themselves out to dry. Specifically the kinds of schools DeVos and Trump set up to scam people out of money, and did so successfully.

We need to be more European in our education. Middle and high school are a joke here in the US. European education includes much more college-level coursework in public education. University is more focused, and/or people attend for a more specific skill or trade. More bang for the buck.

I firmly believe all US citizens should attend college or receive college-level coursework shifted into secondary education. Even if a trade is what they want to do after secondary schooling, great. We need an educated country in order to be competitive with other nations, and we are losing, have lost our edge. No reason a plumber or roughneck or auto tech shouldn’t be able to write, speak, or reason outside of their profitable skillset.

[disneysteve]

No reason a plumber or roughneck or auto tech shouldn’t be able to write, speak, or reason outside of their profitable skillset.

Heck, many people who go to college can't write, speak, or reason that well.

I constantly find mistakes in newspapers and magazines, signs, radio ads, etc. A few weeks ago, the Philadelphia Inquirer, a major big city paper, misspelled a word in the big headline on the front page. Really? How did nobody catch that? Not even spellcheck. And a couple of days ago, I heard a radio ad for some utility service and they said, "Our lines are monitored 24/7 per day". What idiot approved that ad copy? Speaking and writing in correct English is becoming a lost art.

[Fishindude77]

It's the private banking that is by far the biggest problem, though. The lending limits for Federal loans are quite low as I said above. Freshman can only borrow $5,500. That's nothing. For 4 years, the maximum total is $27,000. That's not the problem at all. Nearly everyone who finishes 4 years of school should be able to manage the payments on a 27K debt even if they go into a relatively low-paying field. The big problem is the private loans. They will lend you as much as you want. It's insane.

I'm far from an expert on this topic as we paid for our education and our kids.
As I understand it, the private lenders loans to students are still guaranteed by the federal government. This is why they lend freely.

Per my original post, if the government would just stay the heck out of it all together, then private banks would only loan money to those who either had co-signers, some type of assets for collateral, or if they really had strong feelings about the borrower being successful and paying back the loan. These loans would not be available to everyone, so universities would need to find ways to keep cost down if they wanted more students, and students would have to be much more thoughtful about borrowing.

[Thrif-t]

I thought you needed a co-signer who had good credit in order to get a private student loan?

At some point people need to wake up and educate themselves about stuff. It's so annoying always doing the right thing and others don't then get bailed out. I guess I'm becoming crotchety, let them figure out how to pay back the money they stupidly borrowed

[Snicks]

I think the focus should be REASONABLE tuition, not loan forgiveness. Dh and I have worked very hard and live BELOW our means and banked 529s for our children. For our 3 children, they had or will have completely paid for Undergrad tuition. Our youngest just left for college and we have enough banked to pay her 4 undergrad years. So, yeah, I would be more than PISSED if we lived responsibly, eschewed material things, vacations, nicer cars, etc and poof someone who did not gets a free ride. I will never support that. And if that is the case, then she perhaps I should borrow to the hilt just in case instead. Geez

[LivingAlmostLarge]

But private lending can be very predatory. They make interest rates so high. And part of it is how uneducated people are about how they are like payday loans someways. There is so little financial education people don't even I think fully understand how much they are signing away. But we need to do more to help those truly at the lower end of the scale and not the people who are Upper and middle class who should know better but don't.

[Snicks]

The cost of a degree should vary as well based on real world economics. It should cost less to become a social worker than it does to become a civil engineer. Not because one degree is harder or better, but because in real world economics, the pay off for obtaining a social work degree takes far more years to recoup that cost. We are looking at LOANS and not addressing the silliness that has become College. There are colleges that have lazy rivers and all kinds of silliness when the goal should be a good education. We should be looking at making tuition far more reasonable. Maybe some degrees do not need 4 yrs to complete. Why do students have to take ridiculous electives with course offerings in Lady Gaga or Beyonce? It's absurd.