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On December 27 2021 10:46 micronesia wrote:
To be clear, I wasn't talking about people going to school forever. I was talking about people simply refusing to pay their loans for whatever reason, even if they are not in school. Wage garnishment, as BlueBird identified, is one way around the problem, but I'm not sure how "fringe" the ways to avoid wage garnishment are. Similarly, if someone owes a tremendous amount of money, they may not care about taking a "temporary" hit to their credit while they delay making any payments (even if they plan to pay it all of later when the amount owed is effectively worth less). If wage garnishment and reduced credit score are not sufficient motivators, then it's unlikely the fees will be since they will most likely be much less than the current 5% interest rate. If any of my thoughts are demonstrably wrong here, then fine.
Your springboard into a lecture about why you shouldn't look at fringe situations for the viability of a system is neither warranted nor appreciated.
Perhaps I am misunderstanding you. Wage garnishment means the payments are directly taken from someone's paycheck. If you are saying this system isn't tenable to you because "what about people who get a degree, work for cash, don't need credit and stay off the grid?", then yes, you absolutely need that lecture. If you are just bringing that up as non-critical flaw of the system, then you do not need the lecture.
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United States24690 Posts
Basically I don't know how critical it is. The current rules associated with wage garnishment for unpaid student loans are likely based on the assumption that those loans also have interest rates. If you remove the interest rates, the current rules may not be effective (in many cases, not just one or two fringe people). If it's too expensive for the government to seize the wages, for example, then your plan may not work without one or more additional components. I'm questioning the viability, recognizing I'm not an expert. I'm not trying to find a tiny flaw and use that to prove your plan is imperfect and should therefore be dropped.
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How about we not make student loans so special and let them be discharged in bankruptcy like everything else
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On December 27 2021 09:51 Gorsameth wrote:Show nested quote +On December 27 2021 09:15 DarkPlasmaBall wrote:On December 27 2021 06:44 Mohdoo wrote:
For those of you against forgiveness, what about this?
1) In order to receive federal funding, universities may not increase tuition more than inflation % per year.
2) All loans set to 0% interest
3) All balances reset back to original balance. All payments previously made are applied to that original balance
I'm not against student loan forgiveness, but random question: If loans are set to 0% interest, then wouldn't the loaners lose money on giving their loans, due to inflation? Giving $10K now is worth more than receiving $10K back in 10 or 20 years, right? They wouldn't even break even? What incentive would they have to give loans, if not to eventually make more money back? yes the loaners technically loses money on the loan. But if the loaner is the government the return is a productive educated citizen which over his/her lifetime will make the government much more money then it would make on the loan. The goal of students loans shouldn't be to make money through interest payments, but an investment into the countries future.
Agreed. For some reason, I thought we were also including private loan agencies in the conversation (#capitalism or whatever, because 'Murica) and not just the government, but it definitely makes sense to me if we're just talking about the government investing in its people.
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On December 27 2021 10:46 micronesia wrote:
To be clear, I wasn't talking about people going to school forever. I was talking about people simply refusing to pay their loans for whatever reason, even if they are not in school. Wage garnishment, as BlueBird identified, is one way around the problem, but I'm not sure how "fringe" the ways to avoid wage garnishment are. Similarly, if someone owes a tremendous amount of money, they may not care about taking a "temporary" hit to their credit while they delay making any payments (even if they plan to pay it all of later when the amount owed is effectively worth less). If wage garnishment and reduced credit score are not sufficient motivators, then it's unlikely the fees will be since they will most likely be much less than the current 5% interest rate. If any of my thoughts are demonstrably wrong here, then fine.
Your springboard into a lecture about why you shouldn't look at fringe situations for the viability of a system is neither warranted nor appreciated. I'm very confused. Is there no system in the US for the government to collect your outstanding debt, like unpayed taxes or parking tickets? Doesn't the government, through the courts, seize your assets and bank accounts and place you under financial supervision if need be?
How is simply choosing not to pay an option?
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@Gorsameth
I constantly need to remind myself how different US is compared to Europe. On the surface things are very similar, but when You go into details it becomes very weird. Like this student debt discussion, for example. I forgot about student loans being "superloans" and this credit score obsession. I am sure there are other things I am missing. Probably it is easier for US gov to put people in jail than take their things away.
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This does seem to be mostly a US conversation, but it's worth looking at what other countries do. Our system is far from perfect but I'd take it over yours any day, and it's the kind of public/private bastard thing that seems to make sense to Americans.
Here, most universities are semi-independent but federally funded. The government basically pays them to educate people and then recovers some fraction from the students as a loan. The government decides how much it wants to pay, how much to recover, and the unis pretty much have to deal with it. Most balance their budgets by charging much higher fees to internationals to cover the gaps.
As a student, your loan is directly to the government, indexed with inflation, and repayments are garnished from wages once you get above a threshold via the same system as income tax. It's pretty hard to avoid paying if you are in the country and making a reasonable wage, but if you never earn above the threshold, you never pay it back.
A relevant note is that our gov currently expects about 15% of these loans to never be repaid. That's a reasonable price to pay for an educated population, increased social mobility etc, but it's also large enough that delinquency shouldn't be dismissed out of hand.
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On December 27 2021 19:27 Gorsameth wrote:Show nested quote +On December 27 2021 10:46 micronesia wrote:
To be clear, I wasn't talking about people going to school forever. I was talking about people simply refusing to pay their loans for whatever reason, even if they are not in school. Wage garnishment, as BlueBird identified, is one way around the problem, but I'm not sure how "fringe" the ways to avoid wage garnishment are. Similarly, if someone owes a tremendous amount of money, they may not care about taking a "temporary" hit to their credit while they delay making any payments (even if they plan to pay it all of later when the amount owed is effectively worth less). If wage garnishment and reduced credit score are not sufficient motivators, then it's unlikely the fees will be since they will most likely be much less than the current 5% interest rate. If any of my thoughts are demonstrably wrong here, then fine.
Your springboard into a lecture about why you shouldn't look at fringe situations for the viability of a system is neither warranted nor appreciated. I'm very confused. Is there no system in the US for the government to collect your outstanding debt, like unpayed taxes or parking tickets? Doesn't the government, through the courts, seize your assets and bank accounts and place you under financial supervision if need be? How is simply choosing not to pay an option?
There are many ways for the federal government to collect debts it is owed, including defaulted student loans. Those ways include wage garnishment, liens on assets, passport freezes, and there are a host of others. However, there are millions of people who are what we call uncollectable in that they own no assets and make very little if any regular income aside from maybe stuff like retirement and food stamps, the likes of which are afforded additional protection due to their being necessary for base subsistence. Relatedly, I would be highly skeptical of the notion that uncollectable folks are getting away with anything, these people tend to live very rough lives and it’s incredibly hard to consistently “game” the system such that one can keep debt collectors at bay. I would wager the vast majority are merely struggling to get by.
Tax cheats, on the their hand, can be very devious and are definitely a problem, but I can’t really speak to that specifically because of professional reasons. However, I would note that it can sometimes be difficult to differentiate between the uncollectable folks and the cheats, which is also a problem.
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United States24690 Posts
I think that's his nice way of saying my concerns are mostly not a problem and the government can probably recoup the funds fine if needed lol.
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Haha nah, I think there’s actually merit to concerns regarding the collection aspect of student loan default, but for somewhat different reasons than those mentioned. The biggest is that the feds don’t lack the tools, they lack the manpower to effectively and consistently use those tools to serve as a systemic deterrent to bad faith use of the system. I don’t think there are enough bad actors to make that directly applicable to forgiveness and loan program changes, but it’s a problem worth considering.
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United States24690 Posts
So with the Supreme Court seriously considering the right for private citizens to sue abortion providers as an enforcement device, can we set up a somewhat similar situation where private citizens can provide extra funding to the IRS and split the profits that result!?
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On December 28 2021 00:56 micronesia wrote:
So with the Supreme Court seriously considering the right for private citizens to sue abortion providers as an enforcement device, can we set up a somewhat similar situation where private citizens can provide extra funding to the IRS and split the profits that result!?
I know it's not what you asked but if the Supreme Court afirms the right to bypass the Constitution through civil cases we're going to see an explosion of this used across the nation. Guns are going to be just about outlawed in California overnight. The press will only be for rich people. Tv rights will be negotiated state by state for censorship reasons.
It's just so wild to see a group of people actively want to ruin their own institution and power so completely.
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Harris saying she wants to solve the student loan crisis. Let’s see what she’s got. We all know the odds of Biden running again are low and Harris somehow winning in 2024 is clearly the preferred option. Do they try to seal the deal by pandering on the student loan issue? Public statements about solving the issue makes me think they might be considering that route. We’ll see!
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I look forward to seeing what Harris tries to do to break through her aura of dislikability. It's going to be damn near disqualifying on it's own, it'd require a truly absurd set of policy proposals and some assurance that there aren't going to be Manchins to fuck those proposals up.
I think this busted Congress is going to haunt Democrats for a while.
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United Kingdom13775 Posts
On December 28 2021 12:12 Mohdoo wrote:
Harris saying she wants to solve the student loan crisis. Let’s see what she’s got. We all know the odds of Biden running again are low and Harris somehow winning in 2024 is clearly the preferred option. Do they try to seal the deal by pandering on the student loan issue? Public statements about solving the issue makes me think they might be considering that route. We’ll see!
Talk is cheap and Harris doesn’t even do that well. I can only interpret the whole line about “looking for a creative solution” to mean that they can’t stomach one of the approaches that involve a write-off of some government debt, so they’re likely to do something really stupid like securitize the loans and sell them off to some loan shark or other. No thanks.
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On December 28 2021 22:57 Zambrah wrote:
I look forward to seeing what Harris tries to do to break through her aura of dislikability. It's going to be damn near disqualifying on it's own, it'd require a truly absurd set of policy proposals and some assurance that there aren't going to be Manchins to fuck those proposals up.
I think this busted Congress is going to haunt Democrats for a while.
If the party has already decided Harris is the future of the party, they have all the data in the world to tell them they have a steep mountain to climb. A very large amount of rage forced Biden to backtrack on regarding student loans. From a birds eye view, letting Harris rather than Biden do something widely popular and appreciated feels necessary, at a minimum. It all just depends on if they insist on Harris being the future. If they want Harris to be the future, it honestly bodes well for student loan reform. She is soooo far in the dumps that I am sure all their data indicates extreme pandering will be necessary.
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I'm much more worried about congress than the next presidency. If the Republicans sweep congress then they will sabotage anything from being done for 2 years and then most likely ride that to presidential victory as well. Competitive races continue to disappear due to gerrymandering, and Trump seems quite interested in primarying Republicans who don't toe the line. So we might see not only Republican control of government again but an increasing number of Trump style politicians.
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EPT
