Student Loan forgiveness idea

Almost any college degree is useless if you don't have a plan.

 

No problem, and thanks. I will add that private student loans are a different issue, albeit related. I always tell prospective students to steer clear of them, unless you have to have them to get a high pay degree like a MD or JD. They are currently not up for forgiveness and probably shouldn't be.

But the federal student loan system is broken and it's wrong to ask basically a kid to take a loan out with those terms at that age. Most parents wouldnt support there child at 19 buying a house or brand new Tesla with 6 figure debt. It's so messed up.... I don't think a 10k forgiveness will help much either, so not sure what it's going to take to get this fixed.

 

My degree is in History. I utilized my research skills I learned from school to get a job doing Marketing Research. Started over 20 years ago, and although Marketing isn't a very high paying profession, I'm doing just fine, with a salary that for my family of four, would put us solidly in the middle class. And one that until about a year ago, was about the same as my wife, who has a STEM degree, and works in Quality Assurance in the food industry.

My story is not that unique. Plenty of "follow your heart" degrees may take some time to establish a career, but we do just fine over time. How else do you explain the only 7% default rate on student loans from schools like the University of Florida, or where I did my undergrad, the University of Arizona, that graduates thousands of liberal arts students every year?

I was told by people 25 years ago at my graduation that my future lied in selling insurance or working retail. What did they know? Absolutely nothing.

For the record, I did get an MBA in Marketing, and graduated about a year ago. Current job pays full tuition reimbursement, and as someone who believes in education, I couldn't pass up the opportunity. But my salary has not significantly changed since then, and still have the same job. My salary and position wouldn't be any different had I not gone back to school, but again, if someone is going to offer me an advanced degree at just the cost of books, I'm going take advantage of it.

 

If our government is in the business of providing loans for higher education as purely an investment in "earning potential," we fundamentally misunderstand the value of higher education. Indeed, the fact that public service loan forgiveness exists undermines your entire rationale here.

It could also be avoided by making higher education more affordable. And your point about the federal government deciding is unavailing. Republicans win the Presidency too. Are you a fan of President DeSantis (*vomit*) deciding which degrees are "legitimate"? It's good that we make it rather easy for Americans to get loans to attend college. It would be even better if we made higher education more affordable so that it is an option for more people.

And that's not even getting into my belief that the government would prove absolutely incompetent at determining which degrees are "legitimate," especially with foresight and on an ongoing basis.

 

Cool story .

 

The Case For Cancelling Student Debt - The Appeal
Student loans, the racial wealth divide, and why we need full student debt cancellation

 

I was thinking the very same thing but then scrolled down a little bit and saw you beat me to it. I think that is a great compromise. Right now student loan interest is an adjustment to income but only up to a certain amount and only if your income is below a certain level. Eliminate the cap on the adjustment and raise the income limit to something reasonable like $200,000 a year.

 

I think a large part of the problem stems from the greed of colleges and universities. When the government provided student loans so easily, they responded by jacking up tuition. Then the government had to loan more money but the colleges just turned around and jacked up tuition again.

I think tuition cost can come down if colleges were required to spend their endowment just like any other nonprofit organization. My understanding is that colleges and universities are exempt from that requirement to spend, I think, 5% of their endowment every year.

It also irritated me to no end that in a time of falling interest rates the government still charges what now would be considered usery rates. Never count on the government to look out for the little guy.

Another example of outrageous government rates is that private mortgage insurance is typically 0.25%, while mortgage insurance on FHA loans was almost 2%.

 

You hit the nail on the head. Her anthropology undergrad degree was a stepping stone to law school and into a highly lucrative profession. Why should her path have been blocked because you don't see the value in a liberal arts degree?

Don't get me wrong, I'm of the mindset that a student borrower should only be taking loans with full knowledge of their future income potential and what their repayment obligations will be. I borrowed a little money to get my engineering degree, and that math was quite simple in that case.

 

Let me throw this back at you. You ask why should her pathway be blocked, and I say why should the taxpayers have to pay for it? I assume they took out the loan with a full understanding that their debt will eventually have to be paid, and I assume they understood the debt would be their responsibility. Now suddenly they demand someone else to pay their bills. I’m not buying it.

 

Let's be clear. I'm not really advocating for loan forgiveness. But there is a societal benefit in providing options for education overall, including student loans. I just don't think the gov't should be the one picking winners and losers (from degree programs).

 

Why? There is a direct benefit to society in having an educated populace. Also, other countries have shown that state-paid education works and controls costs.

I’m not against loan forgiveness but it’s worthless to society if done in a vacuum. It needs to be one part of a complete restructuring of a higher education.

 

We have a system of free public education through grade 12 but that doesn’t stop the government from dictating what, when, how, and why some things should be taught, and other things shouldn’t. No one is saying a person shouldn’t pursue their follow their heart degree in archeological and being the next Indiana Jones, but why should the taxpayers pay for it when what they need is more engineers, medical professionals, teachers, and IT professionals.

 

If you want someone else to pay for your education then you need to expect there will be strings attached. The VA paid for my husband’s college education through a vocational rehabilitation program, but he had to become disabled in combat to get it. He paid the price and continues to pay the price every pain-filled day of his life, so forgive me for not having sympathy for someone with an art history degree not wanting to pay their student loans.

 

I agree with you. A loan is an investment in a person's future, and for someone, it may be the only chance to get a degree. I think it's not right to say who deserves it, and who doesn't.
But yes, it's not that hard to take a loan, so more strick rules are important, and maybe, it will help to reduce the amount of students, who can't pay it off

 

Would be horrible for the nation's finances. You would have millions of kids skate through easy programs in college for the 4-6 years of partying, and wind up with seven years of bad credit, and no marketable job skills. Back to Mom's basement.

The current system is far better. It just needs someone to sit down with the prospective students and parents and tell them how their finances are going to be affected by this upcoming adventure, with a dose of realism to temper their dreams to "own the world on a 2.7 GPA". You would think that high school guidance counselors would do that, but maybe they aren't qualified or they aren't willing to stand up to delusionary parents. Divert two thirds of the students to the local community college to make sure they can survive that before enrolling them in something they may be paying for the rest of their life.

 

Good post, great info, but I have to ask.

Vet military? (backed by DoD education supplements)
Or vet animal doctor? (hence the debt manageable salary)

 

Every 18-year-old has a well-thought-out plan. Allow me to elaborate:

Step 1: Get a college degree.

Step 2: Rule the world.

Step 2-a: If Step 2 doesn't work out, become a social media star and buy a mansion (or several).

It's good to have a backup plan.

 

She is a Veterinarian, not a military vet.

Even with a huge salary like in the medical field, having debt like that is almost impossible to pay off without delaying major decisions like home buying. The suicide rate for veterinarians is among the highest in the medical field due to there debt to income ratio. She has a colleague that had a breakdown and had to be hospitalized. It's a major problem. Ask any Veterinarian or Doctor that has massive debt and coming out of college, most if not all would gladly ruin their credit score for a decade than pay 20-25 years on loans.

 

We need more financial literacy taught. We need Universities to be forthright about the value of the education they are providing and the cost they are charging. Not sure how you do this on the private side. But I think the government should be able to put together a reasonable info sheet to provide this kind of information. Of course you will have the English majors who make millions of dollars. But that is not going to be the norm. Just like you will have Engineers who make far less than the norm. Better financial education with solid factual information along with the idea from the OP are the direction we should go. But not optimistic it will happen and the transition for those who have inked their loans for the cost they signed up for will be tough to navigate.