President Biden "Forgivs" School Debts

[1blackman1]

Oh I didn’t forget. But she’s not out there whining and raging over some 20 something get 10K forgiven.

[Yssup Rider]

Originally Posted by Jacuzzme

You forgot Pelosi’s husband.

Why? Did he come out against this plan?

[Jacuzzme]

Originally Posted by 1blackman1

Oh I didn’t forget. But she’s not out there whining and raging over some 20 something get 10K forgiven.

Probably he’s too busy with insider trading and driving under the influence.

[offshoredrilling]

its a buy a vote on are dime


btw Just got a charge card bill for $50, who will give me #10 to help me pay the bill ????

[Tiny]

Hey Blackman, I couldn't figure out a way to answer this and stay on topic in the other thread, so am moving it here.

Originally Posted by 1blackman1

You do realize that student loans are already forgiven after 20 years. That part’s not new. What’s new is the amount of the monthly payment. I believe the payment is based off IRS allowable expenses. But I’m not clear on that part.

As for the rest of the whining and crying over this, it’s really silly. We already allow people to stuff creditors in far larger amounts. People file bankruptcy every day. This stiffs creditors for hundreds of millions of dollars. I’m sure creditors just pass those costs on to consumers. That’s likely more direct than the federal govt taking on the cost.

Yes, I know that the loans being forgiven after 20 years is not new. What is new is lowering the amount required to be paid annually to 5% of discretionary income from 10%. And, pulling words from the White House fact sheet, "rais[ing] the amount of income that is considered non-discretionary income and therefore is protected from repayment." That's going to cut repayments from many borrowers down to minimal levels. As nevergaveitathought says, people will probably be deducting gym memberships, pussy and every other expense under the sun to figure out what their discretionary income is. Since the IRS will mostly only be auditing people like you, who make over $400,000 a year, going forward, I wonder how they'll root out fraud.

The White House Fact Sheet goes on to provide these examples, which intentionally avoid cases that would highlight this is a welfare program for the better off -- debt relief will be given to any individual making up to $125,000 per year and any couple making up to $250,000:

A typical nurse (making $77,000 a year) who is married with two kids would pay only $61 a month on their undergraduate loans, compared to the $295 they pay now

A typical single public school teacher with an undergraduate degree (making $44,000 a year) would pay only $56 a month on their loans, compared to the $197 they pay now

A typical single construction worker (making $38,000 a year) with a construction management credential would pay only $31 a month, compared to the $147 they pay now

The examples that the White House gives don't give me extreme heartburn, except for the married nurse whose partner may be pulling down another $77,000. It's the examples they don't give. There's no mention of just-out-of-school accountants, lawyers, engineers and investment bankers, huh?

Here's how USA Today puts it. Again, after Biden's executive order, people going forward only have to pay 5% of discretionary income towards their loans. And possibly every expense under the sun will now be considered nondiscretionary -- we haven't been provided details on that yet:

What is discretionary income? Discretionary income is the money that's left after paying taxes and essential cost-of-living expenses....How would Biden’s plan shrink discretionary income?
The idea is to increase the amount of what’s considered nondiscretionary income, which is the income needed to cover necessary expenses including taxes, food and shelter and protect it from repayment. By increasing nondiscretionary income, discretionary income shrinks.

https://www.usatoday.com/story/money...ed/7889028001/


As to your second paragraph, I refer you to this editorial in Bloomberg today, written by their editorial board.

Forgiving Student Loans Is a Costly Mistake
The best that can be said for President Biden’s debt-relief plan is that it could have been worse.


With Wednesday’s long-awaited announcement forgiving the debts of certain student borrowers, President Joe Biden hopes to give Democrats a boost in this fall’s midterm elections. Whatever the short-term political gains, the decision is a costly mistake — and one that the administration will almost certainly come to regret.

Biden’s plan cancels $10,000 in federal student-loan debt for borrowers with annual incomes of $125,000 or less, or $250,000 for married couples. Students who received Pell Grants, which help low-income families pay for college, will have up to $20,000 forgiven. Biden also extended the freeze on loan repayment for all borrowers through the end of the year — the seventh such extension since the start of the pandemic.
The new policy provides relief to more than 90% of the 45 million Americans carrying federal student-loan debt. The White House estimates that 20 million borrowers would see their ledgers wiped clean altogether. Yet student-loan forgiveness of any kind is highly regressive, benefiting those who graduated college at the expense of the roughly 60% of Americans who didn’t. An analysis released on Tuesday found that roughly 42% of the benefits of student loan forgiveness would go to the wealthiest two-fifths of Americans, with the bottom fifth receiving just 12%.

If anything, those figures understate the extent to which this giveaway harms working-class and poor Americans. The combined impact of canceling debt and extending the repayment freeze will cost taxpayers hundreds of billions of dollars. Worse, by depriving the government of expected revenue, it will reduce funding available for investments in K-12 and early childhood learning that would do far more to promote economic opportunity and future growth.

While loan forgiveness won’t put cash in borrowers’ pockets, it still risks fueling inflation by encouraging consumers to spend money they would otherwise have put toward paying off their debts. And wiping out debt now will only encourage students to take out still-bigger loans in the future, reducing incentives for colleges to hold down tuition costs — thus, in all likelihood, making higher education even less accessible for the middle class.

About the best that can be said of this decision is that it could’ve been worse: Progressives had pressured the White House to cancel as much $50,000 in debt per borrower, with no income caps — an even bigger bonanza for the rich and those with graduate degrees. That this order was advanced under a dubious legal rationale — and will surely face challenges in court — only emphasizes that the administration’s goals are more political than practical.

What now? At a minimum, Biden needs to remove any lingering ambiguity about the end of the repayment freeze and make clear that all borrowers will have to resume making loan payments at the start of 2023. The administration should do more to protect taxpayers, for instance, by narrowing the public-service loan forgiveness program, which allows workers in public-sector and nonprofit jobs to wipe out their remaining student-loan balances after making 10 years of payments. Biden’s income-driven repayment plan would allow current and future borrowers to make monthly payments of 5% of their discretionary incomes, half the current amount; the Education Department should work to make it easier for borrowers to enroll in the program and pay automatically, which would reduce their likelihood of default.

These steps would help to limit the damage, but only up to a point. With one announcement, Biden has undermined any commitment to fiscal discipline, reinforced his party’s reputation for catering to elites, created a significant moral hazard, and likely made higher education less affordable for a generation. Canceling these debts may well please parts of Biden’s base. But everyone else will be stuck footing the bill.

https://www.bloomberg.com/opinion/ar...costly-mistake

[Tiny]

One other thing Blackman. Do you know why college tuition costs are out of control? It's because student loans are much more readily available than when we were in school. Now that the deadbeats among our youth will only have to repay pennies on the dollar, it's going to accelerate that trend. Tuition has already gone the way of health care costs in America and now it's just going to get worse.

[WTF]

God Damn, nobody wants to pay their debts anymore....probably stems from everyone watching the government kick their obligations down to the next generation....all started around 1980!

[Lucas McCain]

This loan forgiveness plan has absolutely no financial benefit to me, but if any candidate comes up with a plan for me to pay my ex less in child support, I'd definitely vote for that motherfucker in 2024 and 2028.

[Tiny]

Originally Posted by WTF

Aaa Damn, nobody wants to pay their debts anymore....probably stems from everyone watching the government kick their obligations down to the next generation....all started around 1980!

Yes, Jimmy Carter did a world of hurt to this country

Originally Posted by Lucas McCain

This loan forgiveness plan has absolutely no financial benefit to me, but if any candidate comes up with a plan for me to pay my ex less in child support, I'd definitely vote for that motherfucker in 2024 and 2028.

Good one! You'd exceed the income limit anyway but I imagine like most financially responsible people your age, you've already paid off any student loans you had.

[Jackie S]

Originally Posted by Lucas McCain

This loan forgiveness plan has absolutely no financial benefit to me, but if any candidate comes up with a plan for me to pay my ex less in child support, I'd definitely vote for that motherfucker in 2024 and 2028.

I know it is all rigged toward the moment in a divorce, but
with all due respect, you are not paying your ex wife child support, you are paying your Kid child support.

[1blackman1]

Originally Posted by Tiny

One other thing Blackman. Do you know why college tuition costs are out of control? It's because student loans are much more readily available than when we were in school. Now that the deadbeats among our youth will only have to repay pennies on the dollar, it's going to accelerate that trend. Tuition has already gone the way of health care costs in America and now it's just going to get worse.

I don’t disagree here. Unfortunately, this is the free market at work. Other countries don’t have these same issues with higher education, just like they don’t have these issues with their healthcare system costs. The free market lacks a disincentive to raising costs without the govt stepping in. I’m a capitalist to my heart but I also understand that unfettered capitalism works only for the rich.

[Jacuzzme]

Except it’s not. The government giving loans isn’t the free market. If the feds would stop giving money to people who are clearly unqualified, tuition rates would plummet.

[Lucas McCain]

Originally Posted by Jackie S

I know it is all rigged toward the moment in a divorce, but
with all due respect, you are not paying your ex wife child support, you are paying your Kid child support.

Thanks, Jackie for your lack of sense of humor. I never knew what the whole "child" part of child support meant but now I do so thanks for explaining that to me... I assumed that the smiley face I included after the last sentence of my post made it clear that I was kidding but I obviously assumed wrong. Lol

Originally Posted by Tiny

Good one! You'd exceed the income limit anyway but I imagine like most financially responsible people your age, you've already paid off any student loans you had.

Yeah, I have paid them all off as of a couple of years ago, but it does not bother me that these kids get a little financial relief that I never had the benefit of receiving. But if you really think about it, $10k or $20k is hardly like hitting the lottery with these high tuition expenses. If it was a more material amount, I would probably feel differently.

[Jacuzzme]

Originally Posted by Lucas McCain

. But if you really think about it, $10k or $20k is hardly like hitting the lottery with these high tuition expenses. If it was a more material amount, I would probably feel differently.

Just the books are that much.

[Tiny]

Originally Posted by 1blackman1

The free market lacks a disincentive to raising costs without the govt stepping in.

I agree with that, as applied to health care. Colleges though are nonprofits. Jacuzzme makes sense, that it's the government incentives, not an unfettered free market, that are mostly responsible for out of control tuition costs.

And I'd a lot rather see support for education that gives people marketable skills, like plumbing, nursing, engineering, etc., rather than government subsidized loans for education in the liberal arts and the like.

Originally Posted by Jacuzzme

Except it’s not. The government giving loans isn’t the free market. If the feds would stop giving money to people who are clearly unqualified, tuition rates would plummet.