Debt-free College (Warren's plan) - Split from: U.S. Democratic Primary

[MigL]

Recently heard about a gentleman at one of E Warren's campaign stops questioning her about her plan to forgive student loans.
A policy which had previously seemed attractive to me.
He said that he had made many sacrifices to pay off his daughter's student loan, and could he have his money back ?
She of course, said "No".

Seems like a kick in the teeth to all the people who have worked hard and made sacrifices to repay their loans, while those who haven't are going to be rewarded with a disappeared obligation.
They knew the choices they were making; a big pay-out from a well paying job. Now they complain that debt repayment takes a big chunk out of that well paying job.

By all means, subsidize and reduce the cost of secondary education, so as to reduce or eliminate student loans.
To simply 'forgive' their debt sends the wrong message...
"If you don't work at your obligations and responsibilities, no worries, someone else will do it for you."

( if this is off-topic in this thread, please split off as this could be worth discussing, and I'd like to hear other's opinions )

[iNow]

It’s strange to me that people who have suffered repayment of student loans can’t desire for others to avoid that same suffering... that just because they didn’t personally benefit from these debt reduction plans currently being discussed then that’s somehow a valid argument against others potentially benefiting in the future. 

It’s a bit like saying cancer patients shouldn’t be allowed to benefit from a new treatment option just because you had to beat your own cancer a few years ago through chemo. Or like saying kids shouldn’t be awarded scholarships bc you had to pay for your college through military service with the GI Bill. It’s dumb and reeks of schadenfreude.  

Edited January 27, 2020 by iNow

[MigL]

Not quite, but I like your cancer analogy.

Making education free from this point on, is like finding a cure for cancer.
No-one ever has to suffer again.
That is equivalent to subsidized or free education, from this point on.

Both you and I developing cancer, and while you re-mortgage your house, and spend your life's savings and kid's education funds on treatment, E Warren comes along, and gives me my treatment for free.
The way you would feel, is the way people who have repaid their debts, would feel.

[iNow]

12 minutes ago, MigL said:

The way you would feel, is the way people who have repaid their debts, would feel.

Put simply, I don’t care how they feel, but I can be an ... well, insensitive sometimes (I’ve also paid my student load debt and my wife’s and am prepping for my kids, too... I still support this because it’s the right thing to do). 

It’s an extension of our existing public education. Just instead of K through 12, it’s K through 16. 

...and if we’re really following the smart money... it’s universal pre-K through 16. 

[J.C.MacSwell]

How would you feel if you don't get cancer treatment when needed...because your taxes went to pay for someone else's student loans instead, even after you paid off your own?

Of course, that assumes there isn't an endless source of money to tap in to...

[MigL]

I call B.S., Inow.
You are a nice guy, but nobody is that nice.
If you deplenished your life savings for treatment, while I got mine for free, you would be upset, say the least.
( maybe not, just because you really like me )

Isn't this America, the land of equal opportunity for all ?
Introduce subsidies, or make education free for everyone going forward, but don't set differing goalposts for people, or treat them differently.
What you want is equal outcomes, that just isn't going to happen.
 

As for JC's question...
Introduce universal health care for all.
The difference is, everyone gets free cancer treatment, i.e. equal opportunity.
Unfortunately, not everyone survives cancer, even with treatment, i.e. unequal outcomes.

Edited January 27, 2020 by MigL

[CharonY]

3 minutes ago, MigL said:

Isn't this America, the land of equal opportunity for all ?

How is it equal opportunity if some folks can enjoy the benefits of higher education whereas others are restricted from it due to financial constraints?

4 minutes ago, MigL said:

If you deplenished your life savings for treatment, while I got mine for free, you would be upset, say the least.

I am not sure why that is hard to believe. Of course I'd rather not pay either, but I do not think it is sufficiently upsetting to deny it to deny benefits to others just not to feel bad. At least that makes much less sense to me.

5 hours ago, Raider5678 said:

Andrew Yang calling him "naive" due to him not wanting to engage in identity politics as one of the last non Caucasian candidates. And now their poll qualified him.

You mean non-majority identity politics?

[Raider5678]

1 hour ago, iNow said:

It’s a bit like saying cancer patients shouldn’t be allowed to benefit from a new treatment option just because you had to beat your own cancer a few years ago through chemo. Or like saying kids shouldn’t be awarded scholarships bc you had to pay for your college through military service with the GI Bill. It’s dumb and reeks of schadenfreude.  

Cancer is not a choice(at least that I'm aware of.).

That's the difference. And as for the treatment analogy, at the end of it, the outcome is the same. Both people are cured from cancer.

 

Imagine a poor man. Made a decision to go into debt so he can get a high paying job. Worked his ass off to get into college, taking $100,000 in student loans. Got out. Got a job. Worked his ass off to pay off all his debt. He finally does it. He buys a small house for $30,000. Net worth: $30,000.

Image another poor man. Made a decision to go into debt so he can get a high paying job. Worked his ass off to get into college, taking $100,000 in student loans. Got out. God a job. Payed the minimum on his student loans while then going and getting a mortgage for his home. Student loan get's forgiven by the government. The government pays his student loan off while he had only payed off a third of it. He spends his remaining $66,000 on a house too. Now he has a $100,000 house. Net worth: $100,000.

Man #2 did nothing wrong. Neither did man #1. But man #2 essentially won $70,000 because of his choices. Man #1 has a LONG way to go now. The outcome is not the same. $70,000 is nothing to laugh over for the vast majority of people. They're going to feel screwed over. Rightfully so.

 

 

 

23 minutes ago, CharonY said:

How is it equal opportunity if some folks can enjoy the benefits of higher education whereas others are restricted from it due to financial constraints?

 

This isn't related though.

At this point, both groups are enjoying the benefits of higher education. 

23 minutes ago, CharonY said:

I am not sure why that is hard to believe. Of course I'd rather not pay either, but I do not think it is sufficiently upsetting to deny it to deny benefits to others just not to feel bad. At least that makes much less sense to me.

 

I don't see why it's easy to believe.

If Bill and Johnny are sitting at the table, and the government gives Bill $70,000 and tells Johnny not to feel bad, and that he should just be happy for Bill, I think that'd be ludicrous.

And at the end of the day, that's what your doing.

A relief is helping someone get to where you are. You're now both equal. This is not a relief though. This is a benefit. Because the person getting it will be substantially farther ahead then the person who did not get it. 

 

Edited January 27, 2020 by Raider5678

[iNow]

It’s about public education. We just add a handful more years after senior year

16 minutes ago, MigL said:

If you deplenished your life savings for treatment, while I got mine for free, you would be upset, say the least.

Maybe, but that’s no reason to avoid doing the right thing for future students 

10 minutes ago, Raider5678 said:

They're going to feel screwed over. Rightfully so.

So what?

[Raider5678]

9 minutes ago, iNow said:

Maybe, but that’s no reason to avoid doing the right thing for future students 

 

For future students is the key.

 

*Sorry. Wrong thread. My bad.

Edited January 27, 2020 by Raider5678

[iNow]

It’s public education. Just a bit longer. 

These counter positions about how it would make people feel... it’s like arguing against universal healthcare because people who got sick before it became available had to pay their own medical bills. 

These same arguments were used 100 years ago when it was proposed that we shouldn’t offer more than an 8th grade education. We’ve prospered tremendously because we did. 

[MigL]

You're misunderstanding iNow ( or maybe we're not explaining properly ).

I have said I have no problem with the introduction of free education for all.
Or universal health care for all.
What E Warren is proposing is retroactively making higher education free for SOME people.
She is 'unbalancing the equation' and giving advantage to one group over the other.

And it seems quite a few people are upset with E Warren over her comments to that gentleman.
(

[iNow]

Let’s avoid the word free. We all know it’s being paid for, just in a different way. It’s not free, but is debt free (or universal). 
 

3 minutes ago, MigL said:

What E Warren is proposing is retroactively making higher education free for SOME people.
She is 'unbalancing the equation' and giving advantage to one group over the other.

Will you please expand on this point? I’m pretty sure I’m not tracking you correctly. It sounds an awful lot like not supporting the beginning of a new universal healthcare program because we’re not going to also retroactively reimburse the bills of people who needed healthcare before it was implemented. 

[Raider5678]

5 minutes ago, iNow said:

Will you please expand on this point? I’m pretty sure I’m not tracking you correctly. It sounds an awful lot like not supporting the beginning of a new universal healthcare program because we’re not going to also retroactively reimburse the bills of people who needed healthcare before it was implemented. 

No. 

A new universal healthcare program would help everyone going forward.

 

Paying off student loans helps some people now. That's about it.

Making college education free helps everyone going forward.

Edited January 27, 2020 by Raider5678

[iNow]

15 minutes ago, Raider5678 said:

Paying off student loans helps some people now.

I guess it’d be useful to explore “some.”

It’d help those crippled by debt today. It’d help businesses who would see increased revenue for their products from those previously too burdened by debt to buy them. It’d help entrepreneurs to start new businesses. It’d help people start families and purchase homes and save for retirement. It’d help those currently working multiple low wage jobs by reducing their monthly repayment burden. That would improve their health and lower medical costs. 
 

https://www.debt.org/students/

Quote

Student loan debt is accelerating so fast that it has become a burden on the U.S. economy <...> Student loan debt has soared from $260 billion in 2004 to $1.4 trillion in 2017; average debt jumped from $18,650 to $38,000 over that same period; and the number of people over 60 with student loan debthas quadrupled in the last decade from 700,000 to 2.8 million.

<...>
The costs for a higher education are among the fastest-rising costs in American society today. Since 1980, tuition costs at public universities has risen from $2,119 to $9,410, a jump of 344%. Private college tuition is up from $9,500 in 1980 to $32,410 in 2017, a jump of 241%

<...>

The latest studies say that 70% of college graduates leave school with student loan debt that averaged $38,000 in 2017. That much debt at that age does not go away quickly and the impact of this is being felt in several areas, notably purchasing a home, starting a business, delaying marriage and contributing to retirement accounts.

<...>

The burden of student debt is the key factor in young graduates not starting a business and the marriage rate for Millennials is plummeting. A 2016 study showed that 81% of women born in the 1990s had never been married and 38% of women born in the 1980s still haven’t married. Economists say that the Millennials will have to put away twice almost twice as much as their parents for retirement savings to be able to maintain a comfortable lifestyle when they quit working.

 

[MigL]

22 minutes ago, iNow said:

It’d help those crippled by debt today. It’d help businesses who would see increased revenue for their products from those previously too burdened by debt to buy them. It’d help entrepreneurs to start new businesses. It’d help people start families and purchase homes and save for retirement. It’d help those currently working multiple low wage jobs by reducing their monthly repayment burden. That would improve their health and lower medical costs. 

And that's with just student loan forgiveness...
Can you imagine the benefits if you also forgave mortgages, car loans, business loans, gambling loans, etc.
It would be a utopia if ALL loans were forgiven.
But no-one would ever be able to borrow money again ( yes, there was quite a bit of sarcasm in there ).

If the reason for having to take a student loan is eliminated ( free education ), I have no problem with that.
If two people take a student loan, knowing it needs to be repaid, and subsequently one repays it while the other has his debt forgiven, Is not one disadvantaged compared to the other ? Or vice versa, is not the other benefitted compared to the one ?

[swansont]

One thing that I don't think was mentioned is that college costs have been rising faster than inflation, and household income. My tuition in 1980, about $5k (rough estimate, plus room & board, another ~$2k), is about $16k in today's dollars. However, tuition at my school is now about $45k. I took out about $10k in loans over my 3.5 years in school (Grants and scholarships plus my parents covered the rest, and I graduated early because of the cost)

 

My total cost was perhaps $25k, meaning I took out loans covering 40% of the cost. Even if someone can cover the same fraction today (harder, because costs have risen faster than inflation and median income), 3.5 years is ~$175k, and 40% of that is $70k. That comparison does not reflect the possibility that a larger financial aid package might be available, but still: the financial burden of people who went to school years ago is smaller than it is today, so the complaint about debt forgiveness needs to account for that — it's the reason that it's now necessary.

 

The real answer there is political suicide, so nobody will come out and say this, but it's "If you wanted debt forgiveness 15 years ago, you should have elected people back then who wanted this to be a priority, but you didn't"

5 hours ago, MigL said:

And that's with just student loan forgiveness...
Can you imagine the benefits if you also forgave mortgages, car loans, business loans, gambling loans, etc.
It would be a utopia if ALL loans were forgiven.
But no-one would ever be able to borrow money again ( yes, there was quite a bit of sarcasm in there ).

In the US we do, to some extent. Mortgage interest, for example, is tax-deductible.

Any outrage directed at helping people pay off their student loans can just as easily be directed at helping people pay off their mortgage.

[iNow]

7 hours ago, MigL said:

Can you imagine the benefits if you also forgave mortgages, car loans, business loans, gambling loans, etc.

I understand what you're saying, but I've never been terribly impressed by these sorts of slippery slope arguments.

Education has a very clear return on the shared economy of our nation. It's an investment with an extremely sound business case and economic rationale, especially in this global marketplace. The world is changing and the ROI of these plans is the reason we extended public education beyond 8th grade 100 years ago, and back then it was an also uncomfortable conversation for many; a conversation where well intentioned people just like you pushed back, as well. It was still the right thing to do then as it is now.

Since you're Canadian, I keep making the comparison to universal healthcare coverage, as I feel that it's simpler to grasp in real terms given that you experience and directly benefit from it yourself already today. When people were trying to implement UHC, do you feel it would have been an effective counter argument to suggest it would lead to government covered auto-insurance, and life insurance, and government forgiveness of ALL loans? Some probably did use those arguments, and they were rightly ignored.

No. This isn't about utopia. It's about education, and education is it's own thing, with it's own unique benefits and return on investment, and it's own reasons for being advocated.We already have public colleges with government subsidized tuitions, yet even that's not enough with the way educational inflation is significantly outpacing education in other domains, is also outpacing wage growth, and with the way executive administrators of universities are inflating their salaries.

Nobody here or in this election are arguing for gambling loan forgiveness. That's just a distraction. It's a red herring. Likewise, nobody here or in this election are arguing for auto loan forgiveness (though, there are plans to improve the asset requirements for auto loans since they're the new "sub-prime" crisis at the moment). That's just a distraction, too. Unfortunately, those distractions resonate with smart people like you, so we need to keep these sorts of discussions going...

https://elizabethwarren.com/plans/affordable-higher-education

Quote

The enormous student debt burden weighing down our economy isn’t the result of laziness or irresponsibility. It’s the result of a government that has consistently put the interests of the wealthy and well-connected over the interests of working families.

Policymakers stood by as state after state pulled back on investments in public higher education and sent tuition soaring. They stood by as for-profit colleges exploded, luring in students with false promises and loading them up with debt as their executives and investors raked in billions in taxpayer dollars. 

Those are problems we can realistically address. Instead of K-12, it becomes K-16. 

 

2 hours ago, swansont said:

One thing that I don't think was mentioned is that college costs have been rising faster than inflation, and household income.

It was in the link I shared, I just didn't quote it. You're right to call this out as a key driver and important distinction.

Edited January 27, 2020 by iNow

[Carrock]

There's some other comparisons worth making.

Banks which got into trouble with e.g. high risk sub prime mortgages got their debts forgiven, to make the subsequent recession less severe(?), while those who owed the banks that money didn't get their debts forgiven, which made the subsequent recession more severe.

Or there's the businessman who made a fortune by bankrupting his companies without repaying debts. He's about to be forgiven using $400 million of Ukrainian aid like it was his own money.

I don't think many on the left would be too upset at cutting back on these subsidies. Quite a few indigent millionaires would support continuing this limited socialism.

 

x-posted with iNow

[MigL]

There could be some truth in that.
Maybe I'm looking at it from a Canadian point of view.

Our tuition is heavily subsidized by the Government to keep it much more affordable.
There is still an 'un-fairness' in the system, as some provinces are more subsidized than others, and some fields of study are not subsidized at all, making them as, if not more expensive than the US ( medical studies comes to mind ).

If E Warren wanted to lower costs of education for everybody, with Government subsidies, I would be all for that.
If she wanted to eliminate education costs altogether, I could back that too ( not sure if too many Americans would ).
But while I may agree that costs for higher education are getting out of control, I disagree that debt forgiveness is the right vehicle to address the situation.

To set up an unfair situation where some repay their debt through hard work and sacrifice, while those who chose not to work hard or make sacrifices to repay their debt, simply have it forgiven, seems to invite defaulting on future debts in the hope of further debt elimination.
( making student loans and higher education even more unattainable )

Since you chose to provide details, Swansont, I'll use your example.
You repaid your debt, and I have no idea how much sacrifice was involved, but I'm sure it was still a burden for you and your parents.
If one of your contemporary school mates chose not to repay his debt ( and his parents didn't help out ) but, after a couple of years, the Government forgave his debt. Would you or your parents feel  you had been treated fairly ?
And when your kids go to an undoubtedly even more expensive university, will you feel the need to help them out, or will they feel the need to make sacrifices to repay their debt ?
Why not just wait for someone to come along and forgive that debt ?
And will student loans not become unattainable for most ( who really need them ) simply because the criteria to qualify will have been tightened considerably, due to  the frequent forgiving of debt ?

[swansont]

 

47 minutes ago, MigL said:

There could be some truth in that.
Maybe I'm looking at it from a Canadian point of view.

Our tuition is heavily subsidized by the Government to keep it much more affordable.

There is still an 'un-fairness' in the system, as some provinces are more subsidized than others, and some fields of study are not subsidized at all, making them as, if not more expensive than the US ( medical studies comes to mind ).

If E Warren wanted to lower costs of education for everybody, with Government subsidies, I would be all for that.
If she wanted to eliminate education costs altogether, I could back that too ( not sure if too many Americans would ).
But while I may agree that costs for higher education are getting out of control, I disagree that debt forgiveness is the right vehicle to address the situation.

How is that any different, as far as economic results go? It's just a matter of how the bureaucracy is implemented.

If you tax people so that e.g. $10k of tuition becomes free for all state schools, or you let people take out loans and get forgiveness for their $10k of loans, the end result is the same.

 

47 minutes ago, MigL said:

 Since you chose to provide details, Swansont, I'll use your example.
You repaid your debt, and I have no idea how much sacrifice was involved, but I'm sure it was still a burden for you and your parents.

The burden on my parents was paying for a portion of school as I went. I paid off my loans own my own. I used deferments as available to delay paying them back (being in the navy afforded me this vehicle)

47 minutes ago, MigL said:

If one of your contemporary school mates chose not to repay his debt ( and his parents didn't help out ) but, after a couple of years, the Government forgave his debt. Would you or your parents feel  you had been treated fairly ?

That's not relevant here, for a few reasons. I doubt anyone who graduated 35 years ago still has debt, because of the time and because the debt was smaller. If they chose not to repay, they have suffered consequences already, to their credit rating.

I have discovered government assistance that I did not qualify for, but others did. I got past it. e.g. in ~1990, Oregon did away with some rent assistance program owing to budget cuts, so I missed out while others benefitted in earlier years. That's just how it is. OTOH, I had GI bill benefits. 

Also, as I pointed out, the amounts were smaller in the past.

Criticizing a program for not being perfect is easy, and probably not worth the effort of addressing.

 

47 minutes ago, MigL said:

And when your kids go to an undoubtedly even more expensive university, will you feel the need to help them out, or will they feel the need to make sacrifices to repay their debt ?

That depends on the repayment program. If it's capped, this is not really an issue. If you choose a more expensive (i.e. private) school, you should still be on the hook for that extra money, IMO. 

 

47 minutes ago, MigL said:

Why not just wait for someone to come along and forgive that debt ?

As I pointed out above, this means you've got to be willing to risk your credit rating on not paying money you owe

 

47 minutes ago, MigL said:

And will student loans not become unattainable for most ( who really need them ) simply because the criteria to qualify will have been tightened considerably, due to  the frequent forgiving of debt ?

Why would that make them unattainable? If the banks are guaranteed to get their payment, they would bend over backwards to make these loans. And one would hope the people who most need them are most easily approved, rather than people who are trying to game the system (those who can afford school but try to take out loans anyway)

 

[Phi for All]

Is the resentment mostly because it's about cashy-money instead of something else? As iNow pointed out, you wouldn't resent someone who got better medical treatment than you did because of advancements in knowledge. We may grumble but we understand it when a friend gets more features when he buys the same car we bought 3 years ago. But people's attitudes change a lot when money is involved.

[iNow]

1 hour ago, MigL said:

If she wanted to eliminate education costs altogether, I could back that too

She does. That's part 2 of the plan I linked above

[Raider5678]

7 hours ago, MigL said:

To set up an unfair situation where some repay their debt through hard work and sacrifice, while those who chose not to work hard or make sacrifices to repay their debt, simply have it forgiven, seems to invite defaulting on future debts in the hope of further debt elimination.

I'm all in for making things a level playing field.

But take Bob and John. Both took their loans out at the same time, etc. Bob pays his off, John does not. Government eventually pays Johns debt.

40 years later, the money that John saved from not paying his student debt has been sitting in the stock market.

$70,000 initial investment for 10 years after college, he's got a little over $2 million dollars sitting in his retirement fund.

Bob? He paid his debt. He doesn't have a retirement fund, because he spent those valuable 10 years after college paying his student loans. But Bob shouldn't feel cheated. He should feel happy for John while he's scratching a living off of social security, while John is traveling the world doing who knows what.

 

(Obviously, this is implying both John and Bob make smart financial decisions with the exception of John paying the minimum on his student loans. Also obviously, this is an extreme example. But I think it helps serve the point I'm trying to make.)

 

6 hours ago, Phi for All said:

Is the resentment mostly because it's about cashy-money instead of something else? As iNow pointed out, you wouldn't resent someone who got better medical treatment than you did because of advancements in knowledge. We may grumble but we understand it when a friend gets more features when he buys the same car we bought 3 years ago. But people's attitudes change a lot when money is involved.

Would you feel cheated if we both took a mortgage out, you paid yours off, and then later the government paid off mine since I didn't pay mine off yet?

 

Edited January 27, 2020 by Raider5678

[iNow]

It’s not going to be perfect. It’s not going to benefit all people equally. It’s not going to be fair to some. It’s still the right thing to do. 

7 hours ago, swansont said:

Criticizing a program for not being perfect is easy, and probably not worth the effort of addressing.

Too many people seem willing to let the prefect be the enemy of the good.