I’m onboard with debt relief, but why is no one talking about addressing the systemic problems that got us to this point?
My kids went through college about 20 years ago. Three kids, three schools, thirteen years of FAFSAs and signing loans. And every year - EVERY YEAR - tuition and fees at each school increased more than the rate of inflation, cost of living, etc. Pick an indicator. The increase was greater. And it appears to me that hasn’t changed in the 20+ years since.
The schools have no reason to alter that. Nor do companies like Navient that do everything they can to squeeze every last dime out of each and every loan. They know parents and students will just suck it up and take on the loans and the hassles that go with paying them off.
I live in MA and have tried getting Warren to speak to it. Crickets.
Cancel the debt without fixing this, and 20 years from now this will still becan issue.
It seems to me it would be a political winner to address the systemic problems simultaneously.
My wife and I were used to paying credit cards and mortgages, which is to say we were used to seeing reasonable payments against principal every month. At times when we could, we paid even more against principal. When we realized Navient was billing far too little against the value of the loans, we just decided to pay more monthly.
And that's when things got interesting.
To make a longer story short, there was no easy way to do that like there was for any and all of other loans. Navient would not accept a single payment that included both the minimum monthly payment plus an amount to be applied to principal. Not only that, some period of time after we would figure out how to traverse the their website to find the form to make the added payment, they would change the path of clicks to the form. A good bit of my career focused on human factors engineering. I never saw anything so convoluted before then or since. No way was it unintentional. No one developing UIs made the paths as opaque as they were by accident.
(Aside: There was meme going around at that time of a woman whose loan principal had ballooned to about three or four times what it was when she graduated. It was easy for me to understand how that could happen when the monthly minimum barely touches the principal. Miss a few payments when the interest dominates the payment, the interest gets tacked on as principal, the monthly payment goes up ... a vicious cycle and virtually certainly designed in)
What was and remains difficult for me to accept was how a system that (in concept, anyway) was intended to increase the competitiveness of our work force would saddle young workers just starting out with financial burdens of such magnitude. This could especially be the case for students who were the first from their families to attend college, whose parents might not know how to spot such unethical practices. Being an engineer, I got the math, and I was and remain pretty certain that what was going on should have been stopped years ago. Is there really so much short term greed among the actors in this system that they wouldn't at least pretend that students and their families are sahort and long term stakeholders?
We finished paying off our loans about a decade ago. It would be interesting to hear from others whether if these practices continue. I'm no lawyer, but there ought to be a class action suit somewhere in all of this if it's still happening.
The companies holding student loans are as cynical and ethics-free as payday lenders and rent-to-own companies (who are basically appliance stores with a 300% markup). And schools are willing partners in this. Those “sheepskins” graduates earn were fleeced from the students and parents left on the hook.
He should do it. If R's threaten litigation, let them hang that albatross around their necks--another unpopular position for them to own.
Not only would this be a big announcement on its own, but he could use it to showcase/raise awareness of his other recent student aid proposals--raising Pell grant awards to $8,670 annually, support for HCBUs and Tribal colleges, $200m for "career connected high schools" that let kids earn college credit. This has gotten little attention but it should. It's another way to reduce college costs and thus future debt--addressing some of the "fairness" concerns about how cancelling student debt today does nothing to help future students.
These latest proposals rest with Congress, maybe a little pressure would help. A midterm issue that would help the D's.
Let’s say that today all student debt is cancelled. The class of 2026 then starts school in a few months. Tuition and fees haven’t changed. They will still need loans and grants to pay for school. So we start running up debt that we have just built an expectation will be forgiven at some point. What will change? Several things: More unprepared and uncommitted kids will take on college as a flier. Or just to have that “college experience”. Schools will increase the rate at which they charge tuition. There’s nothing magically ethical about schools—use hospitals as an example. The more generous insurance gets, the faster their prices go up. We have already seen that happen as student loans have been easier to get.
Schools and lenders don’t collude because they haven’t had to. Both groups were savvy enough to realize that the loan - tuition situation turned into a giant hog trough they could both feed from.
I realize students and their parents have been conned. I wish we could charge back a third of these loan balances to lenders, and a third to the schools, and let the students pay a third. Then everyone gets a lesson.
If I am a 20-something EMT, LPN, plumber, etc, who had to pay for my technical training myself, how pissed will I be at this?
Finally, imagine what would happen if the government paid off all credit card debt. Or gambling debt. Or mortgage debt. This simply can’t happen without fundamental reform of the processes that got us here.
I hate to be a downer, but cancelling student debt right now would be more than a bit tone deaf. Stick with me here...
Student loan debt impacts about 12.9% of the population. Significant, but far from a majority. Of those, about 40% (or 5% of the overall population) are in the ugly situation of having taken on the debt without ever earning a degree. Some percentage of those folks are being helped by the Biden administrations efforts to relieve those defrauded by for-profit colleges. The other 60% are, by and large, doing better - even with the loan debt - than those without a degree. Over their lifetimes they will do much better, earning almost 2x more.
So the soundbite net of that is: "most people with college debt are still doing better than average".
If Biden were to wave the executive wand and cancel $10k for everyone, it would be seen as essentially the same as handing $10k checks to a group of people who are already doing better than most (at least by the numbers). I can already hear Ted Cruz shouting, "Look! The democrat elites just gave ten grand to their own kids! What did they do for your kids?"
In normal times, that might wash out after a couple of cycles. With record inflation eating everyone's savings it would land and become yet another stupid talking point in the already inflamed education genre of culture war.
What Biden is doing now - programs to fix the broken aspects of the student loan system and turning off interest - is as good as it gets until the economy stabilizes and his numbers improve. Forgiveness (or better yet, greatly expanded opportunities to earn forgiveness by taking public sector and/or not-for-profit jobs) should wait until at least after the midterms, and more likely until a second term.
Oh, random thought: if you want to get the youth vote to turn out, focus on drug reform (mostly legalizing pot at the federal level). And FFS start clearing out the gerontocracy that seems to have a hold on the government. Nothing is less interesting to today's youth than people my age and older.
I so agree with this. I am all in on electing more young people. I truly believe it is their time to step up and lead. It has to be disheartening to see leaders that are older than their own parents who refuse to step aside (looking at you...Senator Feinstein).
I'm with Steve all the way on this. Now is not the time to give more money away. Inflation is a major GOP talking point which resonates with some Democrats as well. There is also the perception of fairness. Millions of Americans took out and paid off student loans and don't feel forgiving loans today is fair. Biden's elimination of interest payments during the pandemic crisis was certainly seen as appropriate. Steve nailed it when he could hear Cruz blasting Democrat's for padding their own pockets. This is not the time to do anything "big." We've got an election to win and Republicans will use every lie and half-truth they can against us.
When this has come up during canvassing NAVs, I hear either strong support or strong and very irritated opposition. And much more of the latter than the former. If I have the chance to pursue the conversation, those opposed to "cancel student debt" are very amenable to student debt relief AND reigning in the escalating costs of public education, including vo-tech training and apprenticeships. I'm afraid that the drumbeat of those three words "cancel student debt" have had a similar impact (and abuse by Republicans) as "defund the police". It puts us in a position of explaining and having to have a deeper conversation, and at the same time throws up a hurdle to that very conversation. I love Elizabeth Warren like crazy and phone and text banked like a mofo for her during the primary. But that hashtag seems to have hurt more than helped.
It's the interest on these loans that steals your soul. We made payments for years, and the principal didn't budge. The overall amount due on the loan was actually BIGGER. Not only should student loan debt be forgiven, I believe future student loans should be zero interest. Our taxes can manage the administrative costs.
After reading through this thread it occurs to me that another very popular thing that the administration could do is to bring the wrath of the Federal Government down on the student loan industry. A very noisy, public investigation by the Department of Education. An NPRM that drastically tightens up the rules for student loan servicing companies. A few executives hauled off to Leavenworth for deceptive business practices. These would all go a long way to solving the problem and would be seen as doing good by more than the 12.9% of Americans who have student loans.
First off, I have a lot of student debt that I willingly took on. Second, I also understand that not everyone is doing as well as me, which says a lot when I am a social worker. I want to pay my student loans, but even the payment generated by the income-driven formula is too high for me to make. It would be amazing for my monthly payment to be reduced by $100.
I think there are some creative ways to help people out with this without Ted Cruz crowing about it on Fox News and Twitter.
This hits home. If Biden cancelled $10K of my daughter's debt, I would sure as hell share that on social media, immediately and just before the midterms.
I’m onboard with debt relief, but why is no one talking about addressing the systemic problems that got us to this point?
My kids went through college about 20 years ago. Three kids, three schools, thirteen years of FAFSAs and signing loans. And every year - EVERY YEAR - tuition and fees at each school increased more than the rate of inflation, cost of living, etc. Pick an indicator. The increase was greater. And it appears to me that hasn’t changed in the 20+ years since.
The schools have no reason to alter that. Nor do companies like Navient that do everything they can to squeeze every last dime out of each and every loan. They know parents and students will just suck it up and take on the loans and the hassles that go with paying them off.
I live in MA and have tried getting Warren to speak to it. Crickets.
Cancel the debt without fixing this, and 20 years from now this will still becan issue.
It seems to me it would be a political winner to address the systemic problems simultaneously.
So why is it not at least discussed?
"[S]ystemic problems", got that right Rick; I call them unfair business practices ... UNENFORCEABLE business 'practices. Litigaation? Bring it on.
An example from almost 20 years ago:
My wife and I were used to paying credit cards and mortgages, which is to say we were used to seeing reasonable payments against principal every month. At times when we could, we paid even more against principal. When we realized Navient was billing far too little against the value of the loans, we just decided to pay more monthly.
And that's when things got interesting.
To make a longer story short, there was no easy way to do that like there was for any and all of other loans. Navient would not accept a single payment that included both the minimum monthly payment plus an amount to be applied to principal. Not only that, some period of time after we would figure out how to traverse the their website to find the form to make the added payment, they would change the path of clicks to the form. A good bit of my career focused on human factors engineering. I never saw anything so convoluted before then or since. No way was it unintentional. No one developing UIs made the paths as opaque as they were by accident.
(Aside: There was meme going around at that time of a woman whose loan principal had ballooned to about three or four times what it was when she graduated. It was easy for me to understand how that could happen when the monthly minimum barely touches the principal. Miss a few payments when the interest dominates the payment, the interest gets tacked on as principal, the monthly payment goes up ... a vicious cycle and virtually certainly designed in)
What was and remains difficult for me to accept was how a system that (in concept, anyway) was intended to increase the competitiveness of our work force would saddle young workers just starting out with financial burdens of such magnitude. This could especially be the case for students who were the first from their families to attend college, whose parents might not know how to spot such unethical practices. Being an engineer, I got the math, and I was and remain pretty certain that what was going on should have been stopped years ago. Is there really so much short term greed among the actors in this system that they wouldn't at least pretend that students and their families are sahort and long term stakeholders?
We finished paying off our loans about a decade ago. It would be interesting to hear from others whether if these practices continue. I'm no lawyer, but there ought to be a class action suit somewhere in all of this if it's still happening.
The companies holding student loans are as cynical and ethics-free as payday lenders and rent-to-own companies (who are basically appliance stores with a 300% markup). And schools are willing partners in this. Those “sheepskins” graduates earn were fleeced from the students and parents left on the hook.
👍👍👍
He should do it. If R's threaten litigation, let them hang that albatross around their necks--another unpopular position for them to own.
Not only would this be a big announcement on its own, but he could use it to showcase/raise awareness of his other recent student aid proposals--raising Pell grant awards to $8,670 annually, support for HCBUs and Tribal colleges, $200m for "career connected high schools" that let kids earn college credit. This has gotten little attention but it should. It's another way to reduce college costs and thus future debt--addressing some of the "fairness" concerns about how cancelling student debt today does nothing to help future students.
These latest proposals rest with Congress, maybe a little pressure would help. A midterm issue that would help the D's.
Let’s say that today all student debt is cancelled. The class of 2026 then starts school in a few months. Tuition and fees haven’t changed. They will still need loans and grants to pay for school. So we start running up debt that we have just built an expectation will be forgiven at some point. What will change? Several things: More unprepared and uncommitted kids will take on college as a flier. Or just to have that “college experience”. Schools will increase the rate at which they charge tuition. There’s nothing magically ethical about schools—use hospitals as an example. The more generous insurance gets, the faster their prices go up. We have already seen that happen as student loans have been easier to get.
Schools and lenders don’t collude because they haven’t had to. Both groups were savvy enough to realize that the loan - tuition situation turned into a giant hog trough they could both feed from.
I realize students and their parents have been conned. I wish we could charge back a third of these loan balances to lenders, and a third to the schools, and let the students pay a third. Then everyone gets a lesson.
If I am a 20-something EMT, LPN, plumber, etc, who had to pay for my technical training myself, how pissed will I be at this?
Finally, imagine what would happen if the government paid off all credit card debt. Or gambling debt. Or mortgage debt. This simply can’t happen without fundamental reform of the processes that got us here.
I hate to be a downer, but cancelling student debt right now would be more than a bit tone deaf. Stick with me here...
Student loan debt impacts about 12.9% of the population. Significant, but far from a majority. Of those, about 40% (or 5% of the overall population) are in the ugly situation of having taken on the debt without ever earning a degree. Some percentage of those folks are being helped by the Biden administrations efforts to relieve those defrauded by for-profit colleges. The other 60% are, by and large, doing better - even with the loan debt - than those without a degree. Over their lifetimes they will do much better, earning almost 2x more.
So the soundbite net of that is: "most people with college debt are still doing better than average".
If Biden were to wave the executive wand and cancel $10k for everyone, it would be seen as essentially the same as handing $10k checks to a group of people who are already doing better than most (at least by the numbers). I can already hear Ted Cruz shouting, "Look! The democrat elites just gave ten grand to their own kids! What did they do for your kids?"
In normal times, that might wash out after a couple of cycles. With record inflation eating everyone's savings it would land and become yet another stupid talking point in the already inflamed education genre of culture war.
What Biden is doing now - programs to fix the broken aspects of the student loan system and turning off interest - is as good as it gets until the economy stabilizes and his numbers improve. Forgiveness (or better yet, greatly expanded opportunities to earn forgiveness by taking public sector and/or not-for-profit jobs) should wait until at least after the midterms, and more likely until a second term.
Oh, random thought: if you want to get the youth vote to turn out, focus on drug reform (mostly legalizing pot at the federal level). And FFS start clearing out the gerontocracy that seems to have a hold on the government. Nothing is less interesting to today's youth than people my age and older.
I so agree with this. I am all in on electing more young people. I truly believe it is their time to step up and lead. It has to be disheartening to see leaders that are older than their own parents who refuse to step aside (looking at you...Senator Feinstein).
Right on! Oh, wait. I just revealed myself as part of the gerontacracy.
I'm with Steve all the way on this. Now is not the time to give more money away. Inflation is a major GOP talking point which resonates with some Democrats as well. There is also the perception of fairness. Millions of Americans took out and paid off student loans and don't feel forgiving loans today is fair. Biden's elimination of interest payments during the pandemic crisis was certainly seen as appropriate. Steve nailed it when he could hear Cruz blasting Democrat's for padding their own pockets. This is not the time to do anything "big." We've got an election to win and Republicans will use every lie and half-truth they can against us.
👍👍👍
When this has come up during canvassing NAVs, I hear either strong support or strong and very irritated opposition. And much more of the latter than the former. If I have the chance to pursue the conversation, those opposed to "cancel student debt" are very amenable to student debt relief AND reigning in the escalating costs of public education, including vo-tech training and apprenticeships. I'm afraid that the drumbeat of those three words "cancel student debt" have had a similar impact (and abuse by Republicans) as "defund the police". It puts us in a position of explaining and having to have a deeper conversation, and at the same time throws up a hurdle to that very conversation. I love Elizabeth Warren like crazy and phone and text banked like a mofo for her during the primary. But that hashtag seems to have hurt more than helped.
It's the interest on these loans that steals your soul. We made payments for years, and the principal didn't budge. The overall amount due on the loan was actually BIGGER. Not only should student loan debt be forgiven, I believe future student loans should be zero interest. Our taxes can manage the administrative costs.
After reading through this thread it occurs to me that another very popular thing that the administration could do is to bring the wrath of the Federal Government down on the student loan industry. A very noisy, public investigation by the Department of Education. An NPRM that drastically tightens up the rules for student loan servicing companies. A few executives hauled off to Leavenworth for deceptive business practices. These would all go a long way to solving the problem and would be seen as doing good by more than the 12.9% of Americans who have student loans.
First off, I have a lot of student debt that I willingly took on. Second, I also understand that not everyone is doing as well as me, which says a lot when I am a social worker. I want to pay my student loans, but even the payment generated by the income-driven formula is too high for me to make. It would be amazing for my monthly payment to be reduced by $100.
I think there are some creative ways to help people out with this without Ted Cruz crowing about it on Fox News and Twitter.
Dan, why aren’t you one of Biden’s top advisers or in the Democratic Party leadership? Your knowledge, insight, and wisdom are amazing.
This hits home. If Biden cancelled $10K of my daughter's debt, I would sure as hell share that on social media, immediately and just before the midterms.