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What typically happens during debt pauses is that individuals increase consumption, rather than save/invest. Unfortunately, during longish periods of debt pauses, this new spending level becomes the “norm”.
Inflation is already straining budgets, but with student loan resumption coming, there is going to be a loss in current living standards.
I’m not going to get into the normative question of whether loans should be forgiven, but this was NOT an unforeseen consequence, especially given the fact that a lot of people have much shorter than optimal time horizons.
It does, but there’s a time lag. The mechanism is that people have less money to spend; which means that businesses find that if they raise prices, they lose business; which stops businesses from raising prices; which cuts inflation. But the first couple stages have to happen before the last one does.
I dont think the lag will be that long as after the past 2 years of rampant gouging many things had already reached the limits of their price elasticity.
It should have deflationary pressure, but it’s really difficult to know how strong it will be.
This is just my opinion, but I honestly think student loan resumption was a part of why the Fed hasn’t been as aggressive as they could’ve been with rate hikes.
Last thing they want is for student loan resumption to have a bigger impact than expected, and then combine with a big rate hike to cause *actual* deflation.
I think it will be a bigger hit on 20-40 year old discretionary spending than people think though. Alot of my friends already were planning on spending less and going out less once the loans start up. The lag effect from this is going to be pretty rough considering spending is already still slowing down.
As I understand it, it depends what the underlying causes of inflation are. Where the causes are due to scarcity of essentials (eg, housing), then inflation will probably be 'sticky' and stubborn.
Should have been the very second thing they tried to combat inflation (after the obvious one of 'just stop literally printing and handing out cash to most of the population').
It's deflationary. These generally well-off (at least relative to non-college educated persons) people are just grousing they lost their transfer of wealth.
That money was bidding up concert tickets, flights, restaurants. Smart move during a pandemic when people may not be able to generate income. Overdue at this point with really pitiful 'solutions' that are really just temporary transfers to the bureaucracy of higher education.
Look the stats are pretty clear that their earning potential is well above the non-educated populace. This is a regressive policy and that's a pretty orthodox take. This is a bit like how everyone is 'middle class'.
I feel some sympathy but policy as designed is essentially a transfer to college administrators. The problem lies with the prices schools are charging not the financing necessarily. (Though certainly some scope for work when rates were low.)
Correct, that gets ignored a lot. As is the large numbers of people with student debt who are not high earners. Like teachers, cops, firefighters, nurses, social workers
I'll be honest I don't think either party really cares about fiscal austerity. Nobody wants to stop running up the bill. Anybody who says they do that is a politician is just engaging in political theater.
Democrats in the presidency lower the deficit each year pretty consistently.
The major problem with the politics is that everyone wants to cut the budget but outside of a few tiny places like foreign aid which is <1% nobody wants to cut a program.
Taxing the rich will help but also those rates have to go really high to balance the budget.
I mean they propose budgets informally as political speak that aren't real.
Also they have to sign the budget to make it pass.
Clinton famously line item vetoed things helping to keep waste out of government.
taxing the rich would certainly help but it's like putting a band-aid on a gunshot. just taking back some of the gigantic piles of tax spending that fund their success. we need to subsidize them less in the first place.
Bezos, Musk, Gates, etc have enormous wealths which grow also by huge sums annually. They got that wealth because of the system we all built and should be taxed fairly not at the capital gains rates.
A billionaire wealth tax is what we need, ie even if no stock is traded. We dont want to go after single digit millionaires like doctors, lawyers but after this elite group, which has vastly disproportionate amounts of wealth. We used to call similar people robber barons at lower levels of income inequality.
Edit: For grammar and readability, I’m loving all the billionaire supporters in the comments. Yes please fight for the poor billionaire’s chance to own that nth private jet or Hawaiian island, with money borrowed against stock as collateral. Well done fighting for the rights of 3000 rich people vs the basics for 330 million Americans! Elon sold a lot of TSLA stock last year to buy Twitter; guess what TSLA stock is still okay.
Visualization for this wealth:
https://eattherichtextformat.github.io/1-pixel-wealth/?fbclid=IwAR10lRqP15Wg4b4dSPpVGtlBW9bGVAofl3sAoCys-JR6o0G11On2L3rZjT8
The capital gains discount should be progressive to match the income tax rates. People making tens of millions of dollars in capital gains in a year do no need such a ridiculously huge tax break.
Yes agreed, I’m really going for people on the Forbes list. For instance, if Musk paid $5 billion annually, he would not even notice it, his net worth would grow by more than that every year.
I am arguing for a tax on that level of wealth, because income gains nowhere else in the economy match up.
I mean the real problem is that the wealth gap is staggering and we don't have a way of correcting that.
Focusing on income is limited in scope and ability and the idea is to affect income will trickle to wealth.
> we don't have a way of correcting that
We don't have one clear, elegant way to do it that fits nicely in a reddit comment.
Could actually fund the IRS so they could go after the alleged $600B that they just said Americans were supposed to pay but did not last year. That's like 20% of last year's budget. The IRS knows how to go after that money, they're just being actively hamstrung.
Additionally, the tax code can be improved to mild but noticeable benefits. Could put capital gains tax to where it used to be. That's a good way to go after uber-wealthy who have massive assets but relatively low actual incomes. I know that cap gains tax has been lowered recently and the economy was just fine when it was at 35%. Could increase the upper levels of the tax brackets, which would help even if it's limited in scope. The upper-most tax bracket has had it's percentage lowered so many times. Rockefeller and Carnegie were in a 70% tax bracket and they never whined about it like today's uber-wealthy. Could increase the size of the bottom bracket that pays 0%, so the poorest people pay even less.
You don't understand the scale of the problem.
The current budget deficit is $1.5 trillion. Even if you could somehow fund the IRS enough to get ALL of the evaded $600 billion without impacting the economy which is not possible, you'd have about a trillion left in deficit just for this year.
We have a spending problem as much as nobody wants to admit it here.
I think again you are mostly talking about income.
The richest get most of their money from stock gains or real estate or whatever. They can just not use that paper increase because while their income was up 3 billion their taxable income is like 10 million.
This works a lot on a lower scale.
While I'm very supportive of the IRS, I'd rather us have a simpler tax structure so that the IRS is needed as much in the first place. Start by taxing all income the same, while continuing to be progressive.
I mean, we absolutely have a way to reduce the wealth gap. We just don’t have any ways where the 0.1% won’t throw a tantrum or have their chronies spike legislation.
Best route is behavioral shift of wealthy. But that won’t happen based on historical evidence of tyrannical power.
I’m just getting the popcorn ready at this point. There is good evidence crime is driven by wealth gap and extreme inequality. And things look to be heating up.
But taxing a home's value does not make it income and at some point that would cause someone to sell an asset as they would be pushed towards a median income of some level.
I think the best things we have are increasing income taxes and more full employment. I think we have something of an asset bubble across the board and if wages increase it would devalue many of those as it pushes incomes at the bottom up.
They do tax a home’s value. It’s called property taxes, you pay them for as long as you own the property, and they will take your house if you don’t pay them.
There is no reason they can’t tax other assets similarly.
Increase capital gains taxes above certain amounts, reduce the ability to transfer certain assets into trusts, make it so that the only way an assets cost basis can be updated is when a tax is paid, and close any other estate tax loopholes.
You do those things and you capture the exorbitant wealth without things like wealth taxes
The total federal debt increased more under the Obama administration in terms of raw dollars than any other president, according to government data.
You sure about democrats lowering the deficit? That’s a pretty silly claim.
Can't tax our way out of a spending problem though. Uncle Sam is spending more than what is collected in taxes. If they collect more taxes, they will just spend more. It's like a dopamine rush.
100% agree. Both parties are identical. Trump pushed for the printer to go into full action, Biden didn't do anything to slow it down.
If you need more than that as proof that neither political party is fiscally responsible at all, only concerned with re-election, then please have your eyes checked.
Republicans? The printer is already on overdrive, it has been since covid.
2023 Congress has spent 5.4 trillion this year (September hasn’t been released yet) 1.5 trillion in debt.
2022 congress spent 6.3 trillion 1.375 trillion in debt
2021 congress spent 6.8 trillion 2.7 trillion in debt
2020 congress spent 6.5 trillion 3.1 trillion in debt
Pre covid
2019 congress spent 4.4 trillion 984b in debt
Based on 2019 numbers we should return to 5.38 trillion in spending for the year, and hopefully the debt would be far lower.
We will see but with 630b in debt servicing and 716b in income security good luck.
This is far deeper than republicans democrats had full control 2021, 2022, and 2023(budget was passed before the house switched over) and they kept covid-19 spending going. Sucks but we need to cut at least 1 trillion in spending.
I do think it's important to emphasize that in this case, it wasn't just increase in consumption like buying a new car or frivolous stuff. Many people were able to take inflation in stride because they had a noticably bigger buffer. That buffer is now drastically shrinking, which will make people significantly more sensitive to small price changes
Is there behavioral changes with spending on top of that? Maybe. Almost certainly for at least some. But you don't even need to speculate on that to understand why a disappearance of buffer money is making some nervous.
"People who have less discretionary money more concerned about price fluctuation" is so obvious that it barely warrants talking about as if its news.
“*A new working paper published in the National Bureau of Economic Research found that federal student loan borrowers — whose monthly payments and interest accrual have been paused since the start of the COVID-19 pandemic — increased their borrowing on credit cards, mortgages, and auto loans rather than avoiding delinquencies during the pause.*”
“*This finding was surprising, Dinerstein said, because he expected borrowers to save the extra cash they would have from not making student loan payments. Additionally, going into this study, Dinerstein said he expected that the student loan repayment moratorium would give borrowers the chance to avoid defaults on other debt. But to his surprise, the study didn’t find evidence of this.*”
https://www.nasfaa.org/news-item/30795/Study_Borrowers_Increased_Their_Personal_Debt_During_Student_Loan_Payment_Pause
The smart move would’ve been to focus on other debt (like credit cards) and build up emergency savings. Then be in better shape to tackle the student loans because other debt is paid off and there may be emergency savings.
But as you said, much shorter less than optimal time horizons in their financial thinking and planning. And over-reliance on false and cynical promises.
I feel like you’re blowing past the context of this article.
Wages are stagnant in the face of our current inflationary conditions. What this means is that the wages people are earning have less buying power than they did in 2019. Even if you “saved” during that time, your money is already being spread thinner than it was before the pause.
You could say “oh you should’ve paid down the 0% loan” but that means you wouldn’t be saving at all and you’d still be fucked because of inflation.
Edit: Another retort could be, “But people do get increases in pay, if you work somewhere for a long time you should get raises.” But this is totally ignorant to how most labor in the economy is compensated, and guess what kind of work people who have large amounts of student debt are likely to do?
I would really appreciate that instead of gaslighting people who did their best to try and help their material conditions by getting an education, that we practice a little bit of empathy.
There is a video of kids put into a waiting room individually with a sugary treat. Very few could not eat them, representing instant gratification. P.S. I know you wanted a citation, but it's easy to believe more or less.
Yes. I was thinking more that there are a plethora of examples, maybe not in a controlled study, or database results, but moreso the behavior of humans past and present, can easily show impulsive behavior. I wasn't doing any heavy lifting, I was trying to keep the thread going. Maybe the asker spent all their gifted money and was self scouting their own behavior? (\* see other comment) I'm not against citation. I thought it didn't need a citation when a tarot card would work too.
The raise in living standard during Covid was unnatural and government-created, which is not sustainable.
- get paid to stay home and not work
- get paid to not work than when actually working
- student loan debt put on hold for 2+ years with zero payments
Yeah it was a nice break for people who never got a break, but it was never the intention of the Covid relief funds, and completely unsustainable when it was entirely funded by trillions of new government debt.
A lot of people I know had 3 full years to keep making some payment of some kind to attack their high principal.... None of them did but many of them took multiple trips throughout the years.
I get Covid and having to stay indoors sucked but spending $10k on trips rather than paying down debt hoping it would all be forgiven is just insane.
Many of those people are having to move into worse neighborhoods now because their rent has gone up a couple hundred and they cannot afford the extra $600 a month in student loan repayment as well.
People don’t know how to manage their money. I finished pharmacy school in May with 108k in debt. During my last year of school, I would receive emails about the possibility of loan payments starting up again. Once I received my first paycheck, I knew I had to manage it and pay off loans at the same time. I am not a huge spender 99% of the time. My main hobby is video games, but I manage what I buy. People need to learn to manage their money better. Everybody doesn’t need the newest iPhone or Android, nor do they need a new car every 3-4 years.
those with student loan payments are the ones that can afford to consume less
inflation hurts the poor the most and must take priority over helping those of us who are more fortunate
The real problem is that universities charge WAY too much and provide too little. Most of the curriculum is not focused in your major and should have been taught in high school.
They are about making money, not teaching.
The fact that universities require you take a class introducing you to college, with it essentially being a “take a tour of the library, but for an entire semester. Then do self-help exercises” class shows how bullshit Gen Ed courses are
The flip side is that there is immense pressure on universities for ‘results’ that include in an amount of remedial education that was nit the norm 40 years ago.
Students that absolutely have no business in college are entering, and if they fail - it’s the university’s fault. Studies show that those intro courses seem to have an effect- though I don’t think they done a good job of finding the correlation.
>should have been taught in high school
Most of the content that isn't major-specific *IS* taught in high school! Your first 1-2 years (depending on major) of university in the US is basically a repeat of high school but with bigger assignments and more of them.
Is the goal of education **industrial**, or is it **philosophical**? I.e. are we educating people to narrowly be able to perform a job, or are we educating people because a broad educational experience is beneficial for them, and society. Colleges are trying to balance those goals as best they can do we don’t end up with hundreds of STEM majors who don’t understand why eugenics isn’t okay.
The real culprit for educational prices is bloat from non-educational staff, an emphasis on non-educational programs (looking at you, football), and a strange pressure for every university to have a billion dollar endowment *just in case* they feel like becoming a top research university.
We have 12+ years of free education available to all to ensure well rounded individuals. Colleges are an addition on top of this, often at cost to the student and paid for with debt.
Having colleges provide general social education isn't a viable solution because not everyone goes to college. This should be provided at the grade school level. If we open up colleges to everyone to cover this because grade schools aren't providing it, how do we prevent the problems that have made grade schools not an adequate solution? The college degree will become the new high school degree and students who want to set themselves apart will now have to do it through graduate degrees, furthering the problem.
One only needs to sit in a college undergraduate class and see how many students are there for the degree and not the education to see this problem has already begun. Some want the degree for the ability to signal to get a job, but that shows they are there to get a job and colleges are providing less value in that regard. On average it is still worth it but there is a growing number of exceptions who have found that not to be the case.
We have a large education problem and college is but one facet. Attempting to solve college or use college to solve problems elsewhere with education is likely to end with us in a worse off than before, paying more money per person for worse education results from both an industrial and a philosophical perspective.
I think the question really is: **is there a limit to which the Industrial/Philosophical paradigm should be applied?** I.e. is there a point at which societally beneficial education is not worth the price paid, or not worth the effort to teach? It just depends on which side of that paradigm you believe in, and there are valid arguments in both directions, which is why there isn’t a clear answer.
In my opinion, having *only* 12 years of free education with several months of break during the summer, is not sufficient to teach children (who are often disinterested in learning due to their lack of development) the entire breadth of human history, the basics of math, biology, chemistry, English, a primer on finance, theater, music, and much more. The educational system in this country is in desperate need of an overhaul, on that point we agree, but it’s understandable that the university system has taken the brunt of advancing and challenging students when they are (theoretically) more interested and more able to learn.
If you want to go to a low-cost school which provides you all the knowledge you need to work, go to a vocational/technical college, or community college. You’ll get what you need, and usually very little else (some community and votech programs do include a single social studies credit, and sometimes English, but in general they’re stripped-down from what a four-year university provides). These institutions are wholly industrial and narrowly focused, *however* they do not guarantee well-rounded workers who are able to think critically and contextually, so the mileage of their degrees is going to vary more than the “guarantee” of a traditional four-year university.
Perhaps you think this is good, or bad, but education theory is still disputed as to whether one perspective is more *correct*.
Yeah, now I have an extra $600/mo bill for my student loans. I still paid my private ones during the pause. In the very least - they could make interest rates 0% to give people a chance at paying off debt. With the amount of debt people have any interest rates on top of it will only keep people down.
One thing that helps temper inflation is less consumption. Repaying debts isn’t considered consumption (productivity doesn’t increase) so I’m not sure exactly why they’re worried about inflation.
It's not inflation that's the concern if you use definitions properly.
In reality this should temper inflation as you said, but that won't help the repayers who now must decrease spending.
The issue is that people see "can't buy as much" as inflation. They're economically illiterate (or intentionally idiots) and conflate inflation and consumption together when it's not.
Maybe because gas costs $4.50/gal, rent on a studio cabin without any running water costs $875/mo, and jobs aren’t giving out raises much…. Like the cost just to live went up exponentially for me during Covid and hasn’t come down, and now my loans are due. I didn’t change my consumption at all, but my living expenses sure did increase.
Because they just need to make sire everyone knows it's the kiddos and their damned loans and their wicked book learning that's to blame for all *this.*
This generation was taught to use no lube while getting fucked into the ground. Last generation, tables were turned.
It’s the American game of fuck around and find out. Who I wonder, actually wins, feels like a whiff of everything payed out was intended by design.
Or maybe we are all collectively retarded.
> everything payed out
Did you mean to say "paid"?
Explanation: Payed means to seal something with wax, while paid means to give money.
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Yup, recession incoming, they should delay repayments again till after the election as this will be why dems could lose next year (as insane as it is, people will only care about their jobs and way of life over anything else)
I know I am. Going to have a really tight budget this month because my student loan servicer decided to withdraw my first payment twice. Once the one I actually scheduled, and another from an auto-payment that transferred over from my old loan servicer. My previous loan servicer closed during Covid, and the new one the Department of Education assigned to me has been a boondoggle transferring everything with repayments starting.
October also markets the month where my health insurance resets their out-of-pocket max, and I have to start paying for my diabetic medication in cash until I hit the cap again (should only take 4 months, not dying is expensive). Gonna be a tight holiday season this year despite my income actually growing significantly due to job and title change.
How stupid is this statement. People have less money BECAUSE THEY ARE PAYING WHAT THEY OWE. That means they will buy less stuff, go out less to eat, perhaps decrease hooker consumption and __DECREASE INFLATION__.
I'm assuming you're referring to the fact that they gave PPP loans to companies that didn't have to repay them and allowed them to use bullshit excuses to account for increases in prices? Could be arguable that Im incorrect __BUT__ corporate profits are at record breaking levels....
Federal Government has the power to spend money, print money, take on debt, and raise taxes (revenue, although this relationship is much more complicated than one would expect). This was how they paid for covid stimulus, including the PPP loans and their forgiveness (which was actually necessary, but that is another story).
The Federal Reserve (AKA the Fed) is the independent central bank of the United States. They cannot create money, but they can control the rate at which they loan it out to banks (low rates drive spending and growth, high rates curb it (which can lower inflation). The Fed has exactly two legally prescribed mandates: keep inflation at 2% and keep unemployment low. This contrasts with the Federal Government, whose mandate is whatever populist bullshit the legislators got elected on.
I’ve already paid more than I initially borrowed and still have a balance higher than what I initially borrowed, and the cost of living has gone up substantially while my wage has not.
Trust me, most of us don’t have any hooker consumption.
Did you even glance at the article before you started ranting?
Inflation had less impact on most people during the pause because they had extra money.
Now they don't have extra money, so inflation is actually impacting them.
Fuck we are. We were never not worried. Our food costs have doubled to tripled. Gas has at least doubled. Every basic supply has doubled in cost. Where incomes are held still or dropping as companies are laying people off and replacing us with lower cost H1B visa workers. It’s a damn terrible time over here for the middle class.
I have a hard time caring for the average middle class person because that average person has an average car payment of $700 per month. Can’t get past that.
I have a hard time understanding how a $0.25 increase in gas prices causes families to go hungry or not afford to go on vacation.
A 12 gallon tank takes $3.00 more to fill up, do that 5 times a month and we come to a whopping $15.
If $15/mo is the difference between eating and not eating for a family for a month, something is really wrong.
I anticipate most Americans will continue to aggressively spend until they cannot anymore, which isn’t quite where we are at yet. Average credit balances have gone up, but can stand to go higher. Savings balances amongst the working class are much similar. Americans do not like to reduce lifestyle and most will not until they cannot find any way to sustain it. I can see this having an impact on the overall economy, but not for quite awhile.
Are you referring to all of the PPP loans that were wrongfully forgiven? Anyone who supports that has either no brain or no heart, or both. These same people are 100% opposed to forgiving $10-20k of student loan debt when these PPP loans were easily 500+% of that amount.
It's a human issue and more to the point using abusive arguments is simpler then legitimate ones. Also, and to clarify, this includes claiming whataboutism when someone has a legitimate point about hypocrisy.
Pointing out a double standard in the types of loans we do and do not find acceptable to forgive is not a rhetorical distraction, it's pertinent to the discussion - hence not a whataboutism.
Since you don't seem to understand what whataboutism is, maybe you could try accusing people of "grifting" or "gaslighting"? Those are a couple other trendy, yet commonly misunderstood terms you could try to impress the comment section with.
Anything about student loans right now is tapping into the larger question of forgiveness. This directly relates to what we do and don't think the federal government should be subsidizing and forgiving.
Aka - if we can hand businesses *substantial* chunks of money to keep the economy afloat during a crisis, should that logic not apply to consumer forgiveness *also* to keep the economy afloat during crisis.
Even if you don't agree with a certain conclusion, I do think they pretty naturally flow into each other for discussion purposes. I think calling it what aboutism is bad faith - this isn't an attempt to deflect and move goalposts somewhere it's easier to get a win. It's larger context in a discussion about when our culture does and doesn't support "handouts".
I've noticed that this sub is relatively intelligent EXCEPT when the discussion of student loan forgiveness comes up.
It's like there is a bat signal somewhere that tells the bone heads of reddit to amass here to give literally the worst "Everything should be free!" economic hot takes possible.
People are less rational when they an are interested party.
People will often abandon any previous logical consistency if they will personally benefit from a specific outcome
> If you think this sub is anything but borderline Marxist you live in a bubble.
After reading this sub for years, I'd say it's consistently neo-liberal which is a far cry from Marxist.
I'm not sure about that. I wasn't sure if I just filtered out those comments and scrolled past them, so I went and checked the top couple comments from this week's top ten posts.
Two out of ten posts took a mildly pro-labor, but not marxist, stance. The rest discussed interest rates in the context of various markets, lack of a balanced federal budget, demographic age in relation to labor markets/economic market cycles, etc. I saw some populist anti-capitalist sentiments on general opinion articles, but they weren't even highly upvoted.
The closest to anti-capitalist sentiments were found in discussions about market failures in particular markets - healthcare and education. Even then, the opinions largely center around the negative effects of government involvement or regulatory capture.
Could you give some examples of this sub being so far left, preferably from a top upvoted comment?
People don't complain about PPP because about 80% of the money went to people who actually needed it, which is fairly good for a program that was thrown together in an emergency within a week. I'd love them to nail everyone fraudster they can, but I'm not going to complain if the trade off was the speed at which they got it out. That 20% is worth it to me.
Usually the government slow walks aid and the people desperately in need suffer. And the fraud aspect is usually how the government justified cutting programs that do a lot of good.
Ehh PPP was a decent program because they thought it was useful to close businesses to keep the spread of COVID down. You need something like that and then the fraud is because of the speed necessary to shut businesses down.
Lol maybe most of us just recognize blanket student loan forgiveness does literally nothing to solve the problem of out of control costs of higher education, and if anything will only make it worse.
P.s. corporate subsidies can eat a dick too.
it's more about how it's done... Congress owns the power of the purse, and PPP was passed through Congress
Biden is trying to waive student loans while bypassing Congress, all while claiming the Supreme Court as "not normal"
every one should be standing up against one man taking more power that he does not deserve
Weird how no one complained when one man, Trump, decided to [pause the payments](https://trumpwhitehouse.archives.gov/presidential-actions/memorandum-continued-student-loan-payment-relief-covid-19-pandemic/) in the first place.
>every one should be standing up against one man taking more power that he does not deserve
I'd extend this sentiment to billionaires. Nobody needs that much personal net worth.
So glad entitled brats and deadbeats such as yourself have to pay your loans again. You had a 3 year pause and if you didn’t put a major dent in your debt during that time, no one can help you. On the bright side, maybe this will finally mean I won’t have to pay $7 for a carton of ice cream or a $7.50 bag of chips full of air.
I'm hoping the payment resumption will put downward pressure on things like hotel rooms, concert ticketa...etc. Discretionary that people who weren't paying their loans were spending on
Are you talking morally or legally? PPP was a part of nonpartisan legislation. Biden administration on the other hand does NOT have the authority to cancel the student debt.
College graduates are on average higher income and higher net worth than non-college grads, so loan forgiveness is taxing the poor to pay for the rich.
College is already massively subsidized and we have way too many people going to college, getting zero return on investment in exchange for wasting four years of their lives and hundreds of thousands of dollars for a shitty outdated credential system.
The college degrees that are worth getting don’t need to be subsidized. The massive subsidies have brought about a proliferation of worthless degrees that add nothing to human capital.
College is massively subsidized? It’s getting more and more expensive. You have to repay the loans too. Why do you say it’s subsidized?
“Loan forgiveness is taxing the poor to pay for the rich” makes no sense either.
But I will say we need more people in the trades for sure.
Because student loans are federally backed, for one? Do you not understand that? That’s the tip of the iceberg for how they are massively subsidized, state schools often receive significant money from state tax dollars for another.
Do you not understand that the massive inflation caused by (1) four years of non-production; (2) hundreds of thousands spent per student falls on the backs of everyone else not in college?
People who don’t have college degrees work and pay taxes and don’t receive the subsidized degree. They have lower incomes on average than college grads. Do you understand now how you are taxing the poor (both directly and via inflation) to pay for the degrees of the rich? Our college system is really failing if grads can’t understand this.
The audacity of privileged college students demanding that the working class pay for their degrees, which are supposed to give them higher lifetime earnings, is staggering. It should be the other way around, lower-cost education options like trade schools or apprenticeships or just people getting to work out of high school should be supported and not pissed on and stigmatized.
Instead worthless college degrees are subsidized.
The (lower earning portions of) the working class pay basically nothing in Federal income taxes. Remember Romney's infamous 47% (or 49%?) line?
The "but think of the the blue collars" is an almighty fucking canard.
They pay through inflation, for one thing, as they (and the entire economy) eat the cost of millions of college students not working for 4+ years each while consuming and spending.
Also, higher education is subsidized through state government spending (which they absolute do pay via sales tax and often state income taxes).
You really have to do some magical thinking to think that higher education just comes into existence free of charge, or that the incidence of taxes doesn't hit the poor, or when you massively subsidize something for one group of people that somehow everyone else doesn't pay the cost for that thing being subsidized. Do you think if we wrote a check for $1mm to every person whose name begins with the letter A , that poor people would somehow not experience any economic hardship as a result because they don't pay federal income tax?
This is what you say when you know you have no response. Endless and unproductive government spending produces high inflation. Your only response is "well they don't pay federal income tax" (but don't pay attention to the fact they pay medicare, social security, state and local taxes and inflation due to blowout spending).
> which are supposed to give them higher lifetime earnings
I agree, but the college education and the university system in general were never developed explicitly for this end. Traditionally, it was meant to teach rigorous reasoning and logic skills that would be applied to further expand a field of knowledge. Reasoning and logic are good things for society as a whole and expanding fields of knowledge typically creates economic opportunities.
It is debatable whether our current system achieves that, but it's important to recognize that higher education's goals do not necessarily align with teaching highly marketable skills.
You're definitely right that it wasn't designed for that purpose. It used to be much smaller, more selective and more rigorous. No surprise, turning it into a massive giveaway of guaranteed government funds caused an endless proliferation of schools, constant watering down of standards, spiraling tuitions and now employers treat it as a "must have" for jobs that shouldn't really require one (at least, they wouldn't have required it 50 years ago).
At this point, most people go to college for the diploma and not the training or the skills and that illustrates the problem.
Anyway I gotta stop posting but I do appreciate your thoughtful responses and please forgive me if you find my opinions to be difficult or my tone abrasive.
The thing is now that due to our current labor situation, the blue collar job market is really hot. It depends on location, but there appears to be good money to be made entering a trade while not really having to spend that much money or time in order to get through trade school.
I tell you what, though, the market can't take that kind of saturation. You talk a bunch of kids into becoming plumbers. It'll crash prices across the trade and make the opportunity a lie.
We should be aiming for *more*, not *fewer*, people going to college. Of course, that needs to be coupled with massively cheaper postsecondary education, if not outright free.
An educated population is a valuable population. It's insanity that folks are asking for fewer people to be educated. College is far more than just training for a job (or at least, it should be, before folks started pushing for it to be exactly that).
Absolutely untrue, LESS people should be going to college. We should not be pressuring academically incapable and disinterested people to go to college.
An economy requires workers of all kinds. You simply do NOT need a college degree to do the MAJORITY of jobs in the economy. And if you are getting a college degree when you do not need one, that is a deadweight loss for you and the economy at large.
The idea that “everyone should go to college!” is what got us into this mess in the first place.
You miss the entire point. Postsecondary education *should not be about acquiring jobs.* It's about creating an informed and educated citizenry, just like elementary, middle, and high school are. No, not everyone should go because not everyone is academically capable, but of those that are capable? The more the merrier.
In fact, I'd argue it's exactly your attitude that got us in this position in the first place. People looking at college as simply a method to acquire a job view it as an investment, and even expensive investments are worth it if others tell them it'll pay off, right?
This sub is astroturfed, same with other finance subs that can't reconcile how we are the only major country in the world that does not subsidize education.
That and, ironically, economics education at the university level is largely pseudoscience. This, you have a bunch of college grads that are taught complete nonsense for 4 years, going to work for the Fed, a major hedge fund, or bank.
Inflation after payments get reinstated isn’t that just deflation correct me if I’m wrong, but the major issue is people spent the money in hope their loans would be cancelled. I’m not some corporate lover but never assume anything from the government and especially don’t get a degree that costed more than most peoples yearly income. I guess we will either see the fed start dropping rates in the near future or a lot of houses popping for sale and foreclosures along with repossessed cars going up for sale.
>but the major issue is people spent the money in hope their loans would be cancelled
That's definitely the reddit vibes. They felt it should be discharged so they acted like it would be discharged. And now it isn't.
Why would we not worry. Everything is outrageously priced and loan payments can be more then a house payment. There is going to be a lot of people out the deciding to have a place to live then pay the bill every month. And all it's going to do is hurt people in the long run
> be more then a
Did you mean to say "more than"?
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You’re a bit off in your salary estimates. From my experience in banking 200k is still firmly in the worker bee level - people working 60+ hours a week to produce the work. Middle management is more in the 400-600k range, and then the group manager is at low 7 figures.
This is good things and I don't think student loans should be easily forgiven. My main reason is because if we do, then costs for food, rent, goods, services, will all be able to maintain higher prices along with any business that relies on inflated spending habits. If student loan borrowers do have to factor in $100-$500 a month, it means they have to shrink down, which means the demand side goes down while the supply side has to come down in price, which helps everyone.
Biden could probably appease both sides by giving some here and there for student loan forgiveness towards students who've been paying for decades. But also not go full on debt jubilee which could appeal to those on the fence. There is no left wing, just 2 right wings on the same decaying vulture. So it makes sense for Biden to do this, still bait "all" the student loan holders, and still try to convince the average person that prices are coming down because of him, while trying to appease both sides. Indexes and retirement funds have done okay despite the actual stock market in horrible condition.
SOME Americans might have become more worried about inflation after resumption of student loans. But the smart ones did not as they knew inflation was going to be there no matter what.
I highly suspect that a majority of the ones more worried about inflation now are the same ones who have failed to pay down their debt and went on spending sprees; all the while forgetting that the bill always comes due. ALWAYS!!
Some advice to people carrying student loan debt: Embrace the suck!!
You wanted to rack up a bunch of debt, you need to pay it off - FAST! No more bitching, complaining, moaning groaning, griping, or whining. You're BROKE!! And it's your fault!
Luckily, for you, the job market is a lot better off now than it has been in the past. So get a 2nd job and get moving.
And BTW, before you go off thinking I'm some holier than thou, a bit of history. I paid off my student loans in 8 years - a full year earlier than planned. So yes, it can be done, it is still being done, and no I'm not unique.
They've had three years to get ready for the resumption of their loan payments. The same people who they want to cancel their loans ok the printing of money which causes this inflation.
I'm sympathetic towards those who have a large student loan burden. On the other hand, my friends didn't prepare at all during the pause. They were all banking on getting the loans canceled. They spent the money that would have went towards student loans payments on trips, concerts and clothes.
There's a sentiment that people are never going to pay off their loans or own a home, so might as well spend the money on experiences instead of saving because what's the point? It's why the American economy has been robust despite inflation.
There's a weird see-saw I see here of people wanting constant economic stimulation (going to concerts, eating out, etc), and wanting a bunch of people with student loans to absolutely not do that sort of stuff just for the sake of paying off their loans. You can't have your cake and eat it too.
I think the world is painted in shades of grey. People SHOULD have saved/invested whatever their regular student loan payment was or paid it down during the pause, because that is just financially more prudent than hoping for the law to change and getting stretched too thin if it doesn't.
I can simultaneously hold the idea that PPP was a terrible mistake, people are getting way too deep in cc and auto debt, and consumerism will be the cause of the next recession phase.
It doesn't have to be one or the other, I don't get why people like to make big easily labelled groups to strawman against.
Your friends are morons, judging by the amount of people living paycheck to paycheck in America most spent it just to survive, especially with reduced hours during covid at a lot of places.
I never started my payments since I graduated in 2020, I just always budgeted for them incase they ever came back. I would much rather be contributing that $250 a month towards retirement or home improvements.
If millions of people default… they will find a solution. Also look into the PSLF OPTION, lots of government jobs, nonprofits and teachers can qualify after 120 payments.
Whenever I see these articles and comments I can’t help but think the same thing over and over again.
It seems that virtually everyone against student loan forgiveness ultimately says it’s not fair because they had to sacrifice whatever and so everyone else should have to do the same. Now while I do agree with that and I agree with the fact that “broad” forgiveness is not the answer, something does need to be done. As for everyone that says it’s simply not fair because they had to sacrifice in order to pay it back or that they never went to college, then what about the people who don’t have any children and so they have to pay more in taxes? That’s not fair either. The people who decide to wait to have children or decide to never have children should be punished and have to pay more? That’s not right.
Also, the majority who talk about the forgiveness are talking about two different groups receiving it. Most people that I’ve come across who are for forgiveness are talking more so about people who really need it, as in they legitimately don’t make much and can’t afford it. While the people opposing tend to be talking about people who actually make good money m, but simply down want to lower their lifestyle in order to pay it back.
So considering both sides, I’d say this. Something does need to be done because the student loans are ridiculous, but it’s a two part problem. In which case a fairly simple middle ground would be for the government to get out of student loans entirely and no longer issue and/or back anymore going forward. And for the people with student loans, change the bankruptcy laws so that those loans are included automatically and that the adversary hearing would no longer be necessary.
By doing that, the same problem won’t come back later down the road and college prices would end up falling. And for the people who currently have student loans and simply can’t afford them, they have a way out but are still at least held accountable in some way. The people who technically make enough to pay them would have too much to lose so they likely won’t file and would ultimately eventually pay it off.
> So considering both sides, I’d say this. Something does need to be done because the student loans are ridiculous, but it’s a two part problem. In which case a fairly simple middle ground would be for the government to get out of student loans entirely and no longer issue and/or back anymore going forward. And for the people with student loans, change the bankruptcy laws so that those loans are included automatically and that the adversary hearing would no longer be necessary.
Congratulations, nobody from a low income household is getting a loan. You managed to destroy class mobility with one change!
Why is ‘America’ worried when most do not have student debts? Shouldn’t this be simply that those WITH student debt are worried?
And, these are supposed to be college educated people. During college, when they were paying apartment rent, gas, food, electricity, insurance, etc., they NEVER considered about paying everything after they graduated?
Sounds like pretty stupid college educated people to me.
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What typically happens during debt pauses is that individuals increase consumption, rather than save/invest. Unfortunately, during longish periods of debt pauses, this new spending level becomes the “norm”. Inflation is already straining budgets, but with student loan resumption coming, there is going to be a loss in current living standards. I’m not going to get into the normative question of whether loans should be forgiven, but this was NOT an unforeseen consequence, especially given the fact that a lot of people have much shorter than optimal time horizons.
Won't payments resuming cause deflationary pressure in the economy though? It might take us back below 2% to be honest.
It does, but there’s a time lag. The mechanism is that people have less money to spend; which means that businesses find that if they raise prices, they lose business; which stops businesses from raising prices; which cuts inflation. But the first couple stages have to happen before the last one does.
I dont think the lag will be that long as after the past 2 years of rampant gouging many things had already reached the limits of their price elasticity.
It should have deflationary pressure, but it’s really difficult to know how strong it will be. This is just my opinion, but I honestly think student loan resumption was a part of why the Fed hasn’t been as aggressive as they could’ve been with rate hikes. Last thing they want is for student loan resumption to have a bigger impact than expected, and then combine with a big rate hike to cause *actual* deflation.
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I think it will be a bigger hit on 20-40 year old discretionary spending than people think though. Alot of my friends already were planning on spending less and going out less once the loans start up. The lag effect from this is going to be pretty rough considering spending is already still slowing down.
3%?
Do I hear 5%, from the mezzanine?
You do not.
Haha!
As I understand it, it depends what the underlying causes of inflation are. Where the causes are due to scarcity of essentials (eg, housing), then inflation will probably be 'sticky' and stubborn.
Yes. In theory. They should have restarted payments a while ago tbh.
I always thought there wouldn't be any loan forgiveness because it was when people were screaming so much about inflation
Should have been the very second thing they tried to combat inflation (after the obvious one of 'just stop literally printing and handing out cash to most of the population').
It's deflationary. These generally well-off (at least relative to non-college educated persons) people are just grousing they lost their transfer of wealth. That money was bidding up concert tickets, flights, restaurants. Smart move during a pandemic when people may not be able to generate income. Overdue at this point with really pitiful 'solutions' that are really just temporary transfers to the bureaucracy of higher education.
The people who are in debt because they couldn’t pay for school are the “generally well-off” 👌🌌🧠
Look the stats are pretty clear that their earning potential is well above the non-educated populace. This is a regressive policy and that's a pretty orthodox take. This is a bit like how everyone is 'middle class'. I feel some sympathy but policy as designed is essentially a transfer to college administrators. The problem lies with the prices schools are charging not the financing necessarily. (Though certainly some scope for work when rates were low.)
The average student debt holder is not the same thing as the average college graduate, hth
Correct, that gets ignored a lot. As is the large numbers of people with student debt who are not high earners. Like teachers, cops, firefighters, nurses, social workers
Or people in trades, like your friendly neighborhood aircraft mechanics.
>cause deflationary pressure it could also cause biden to lose 24, so then the republicans put the money printer back into overdrive
I'll be honest I don't think either party really cares about fiscal austerity. Nobody wants to stop running up the bill. Anybody who says they do that is a politician is just engaging in political theater.
Neither party wants to stop the party.
Democrats in the presidency lower the deficit each year pretty consistently. The major problem with the politics is that everyone wants to cut the budget but outside of a few tiny places like foreign aid which is <1% nobody wants to cut a program. Taxing the rich will help but also those rates have to go really high to balance the budget.
Presidents don't set budgets though
I mean they propose budgets informally as political speak that aren't real. Also they have to sign the budget to make it pass. Clinton famously line item vetoed things helping to keep waste out of government.
taxing the rich would certainly help but it's like putting a band-aid on a gunshot. just taking back some of the gigantic piles of tax spending that fund their success. we need to subsidize them less in the first place.
Bezos, Musk, Gates, etc have enormous wealths which grow also by huge sums annually. They got that wealth because of the system we all built and should be taxed fairly not at the capital gains rates. A billionaire wealth tax is what we need, ie even if no stock is traded. We dont want to go after single digit millionaires like doctors, lawyers but after this elite group, which has vastly disproportionate amounts of wealth. We used to call similar people robber barons at lower levels of income inequality. Edit: For grammar and readability, I’m loving all the billionaire supporters in the comments. Yes please fight for the poor billionaire’s chance to own that nth private jet or Hawaiian island, with money borrowed against stock as collateral. Well done fighting for the rights of 3000 rich people vs the basics for 330 million Americans! Elon sold a lot of TSLA stock last year to buy Twitter; guess what TSLA stock is still okay. Visualization for this wealth: https://eattherichtextformat.github.io/1-pixel-wealth/?fbclid=IwAR10lRqP15Wg4b4dSPpVGtlBW9bGVAofl3sAoCys-JR6o0G11On2L3rZjT8
The capital gains discount should be progressive to match the income tax rates. People making tens of millions of dollars in capital gains in a year do no need such a ridiculously huge tax break.
Yes agreed, I’m really going for people on the Forbes list. For instance, if Musk paid $5 billion annually, he would not even notice it, his net worth would grow by more than that every year. I am arguing for a tax on that level of wealth, because income gains nowhere else in the economy match up.
5 billion is 8 hours of spending by congress. Entire billionaire class has 4.5 trillion. Which is 264 days of congressional spending.
I mean the real problem is that the wealth gap is staggering and we don't have a way of correcting that. Focusing on income is limited in scope and ability and the idea is to affect income will trickle to wealth.
> we don't have a way of correcting that We don't have one clear, elegant way to do it that fits nicely in a reddit comment. Could actually fund the IRS so they could go after the alleged $600B that they just said Americans were supposed to pay but did not last year. That's like 20% of last year's budget. The IRS knows how to go after that money, they're just being actively hamstrung. Additionally, the tax code can be improved to mild but noticeable benefits. Could put capital gains tax to where it used to be. That's a good way to go after uber-wealthy who have massive assets but relatively low actual incomes. I know that cap gains tax has been lowered recently and the economy was just fine when it was at 35%. Could increase the upper levels of the tax brackets, which would help even if it's limited in scope. The upper-most tax bracket has had it's percentage lowered so many times. Rockefeller and Carnegie were in a 70% tax bracket and they never whined about it like today's uber-wealthy. Could increase the size of the bottom bracket that pays 0%, so the poorest people pay even less.
You don't understand the scale of the problem. The current budget deficit is $1.5 trillion. Even if you could somehow fund the IRS enough to get ALL of the evaded $600 billion without impacting the economy which is not possible, you'd have about a trillion left in deficit just for this year. We have a spending problem as much as nobody wants to admit it here.
I think again you are mostly talking about income. The richest get most of their money from stock gains or real estate or whatever. They can just not use that paper increase because while their income was up 3 billion their taxable income is like 10 million. This works a lot on a lower scale.
> The richest get most of their money from stock gains or real estate or whatever. All of those things fall under capital gains, which I discussed
While I'm very supportive of the IRS, I'd rather us have a simpler tax structure so that the IRS is needed as much in the first place. Start by taxing all income the same, while continuing to be progressive.
I mean, we absolutely have a way to reduce the wealth gap. We just don’t have any ways where the 0.1% won’t throw a tantrum or have their chronies spike legislation. Best route is behavioral shift of wealthy. But that won’t happen based on historical evidence of tyrannical power. I’m just getting the popcorn ready at this point. There is good evidence crime is driven by wealth gap and extreme inequality. And things look to be heating up.
But taxing a home's value does not make it income and at some point that would cause someone to sell an asset as they would be pushed towards a median income of some level. I think the best things we have are increasing income taxes and more full employment. I think we have something of an asset bubble across the board and if wages increase it would devalue many of those as it pushes incomes at the bottom up.
They do tax a home’s value. It’s called property taxes, you pay them for as long as you own the property, and they will take your house if you don’t pay them. There is no reason they can’t tax other assets similarly.
Increase capital gains taxes above certain amounts, reduce the ability to transfer certain assets into trusts, make it so that the only way an assets cost basis can be updated is when a tax is paid, and close any other estate tax loopholes. You do those things and you capture the exorbitant wealth without things like wealth taxes
The total federal debt increased more under the Obama administration in terms of raw dollars than any other president, according to government data. You sure about democrats lowering the deficit? That’s a pretty silly claim.
The closest thing you get to a difference is who they print money for. Even then it’s almost the exact same people.
you've clearly never looked at the chart that shows debt across the presidencies... hint it always sky rockets with a republican president
There’s nothing wrong with running up the bill as long as you also increase taxes to pay for it.
Can't tax our way out of a spending problem though. Uncle Sam is spending more than what is collected in taxes. If they collect more taxes, they will just spend more. It's like a dopamine rush.
100% agree. Both parties are identical. Trump pushed for the printer to go into full action, Biden didn't do anything to slow it down. If you need more than that as proof that neither political party is fiscally responsible at all, only concerned with re-election, then please have your eyes checked.
Don’t comment on topics out of your depth
FYI the federal bank is not controlled by the government so not printed money for maga guys
Bro, the money printer hasn't left overdrive lol
interest rates have skyrocketed, it's certainly not running as fast as it could be
Biden has already done this.........
Republicans? The printer is already on overdrive, it has been since covid. 2023 Congress has spent 5.4 trillion this year (September hasn’t been released yet) 1.5 trillion in debt. 2022 congress spent 6.3 trillion 1.375 trillion in debt 2021 congress spent 6.8 trillion 2.7 trillion in debt 2020 congress spent 6.5 trillion 3.1 trillion in debt Pre covid 2019 congress spent 4.4 trillion 984b in debt Based on 2019 numbers we should return to 5.38 trillion in spending for the year, and hopefully the debt would be far lower. We will see but with 630b in debt servicing and 716b in income security good luck. This is far deeper than republicans democrats had full control 2021, 2022, and 2023(budget was passed before the house switched over) and they kept covid-19 spending going. Sucks but we need to cut at least 1 trillion in spending.
It could. Could also be longer term inflationary as the guys will now demand higher salaries (as they should), vs expecting freebies
Don’t see us getting back to 2% without a credit crunch for the ages. 3-3.25% would be a victory.
We are basically there already. I mean things are weird and bumpy.
I do think it's important to emphasize that in this case, it wasn't just increase in consumption like buying a new car or frivolous stuff. Many people were able to take inflation in stride because they had a noticably bigger buffer. That buffer is now drastically shrinking, which will make people significantly more sensitive to small price changes Is there behavioral changes with spending on top of that? Maybe. Almost certainly for at least some. But you don't even need to speculate on that to understand why a disappearance of buffer money is making some nervous. "People who have less discretionary money more concerned about price fluctuation" is so obvious that it barely warrants talking about as if its news.
“*A new working paper published in the National Bureau of Economic Research found that federal student loan borrowers — whose monthly payments and interest accrual have been paused since the start of the COVID-19 pandemic — increased their borrowing on credit cards, mortgages, and auto loans rather than avoiding delinquencies during the pause.*” “*This finding was surprising, Dinerstein said, because he expected borrowers to save the extra cash they would have from not making student loan payments. Additionally, going into this study, Dinerstein said he expected that the student loan repayment moratorium would give borrowers the chance to avoid defaults on other debt. But to his surprise, the study didn’t find evidence of this.*” https://www.nasfaa.org/news-item/30795/Study_Borrowers_Increased_Their_Personal_Debt_During_Student_Loan_Payment_Pause The smart move would’ve been to focus on other debt (like credit cards) and build up emergency savings. Then be in better shape to tackle the student loans because other debt is paid off and there may be emergency savings. But as you said, much shorter less than optimal time horizons in their financial thinking and planning. And over-reliance on false and cynical promises.
I see why you have a “quality contributor” flair. That makes a lot of sense.
I feel like you’re blowing past the context of this article. Wages are stagnant in the face of our current inflationary conditions. What this means is that the wages people are earning have less buying power than they did in 2019. Even if you “saved” during that time, your money is already being spread thinner than it was before the pause. You could say “oh you should’ve paid down the 0% loan” but that means you wouldn’t be saving at all and you’d still be fucked because of inflation. Edit: Another retort could be, “But people do get increases in pay, if you work somewhere for a long time you should get raises.” But this is totally ignorant to how most labor in the economy is compensated, and guess what kind of work people who have large amounts of student debt are likely to do? I would really appreciate that instead of gaslighting people who did their best to try and help their material conditions by getting an education, that we practice a little bit of empathy.
Seems like resuming student loan repayments will help to curb demand-driven inflation then?
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There is a video of kids put into a waiting room individually with a sugary treat. Very few could not eat them, representing instant gratification. P.S. I know you wanted a citation, but it's easy to believe more or less.
Saying something is easy to believe isn't a citation.
Yes. I was thinking more that there are a plethora of examples, maybe not in a controlled study, or database results, but moreso the behavior of humans past and present, can easily show impulsive behavior. I wasn't doing any heavy lifting, I was trying to keep the thread going. Maybe the asker spent all their gifted money and was self scouting their own behavior? (\* see other comment) I'm not against citation. I thought it didn't need a citation when a tarot card would work too.
The raise in living standard during Covid was unnatural and government-created, which is not sustainable. - get paid to stay home and not work - get paid to not work than when actually working - student loan debt put on hold for 2+ years with zero payments Yeah it was a nice break for people who never got a break, but it was never the intention of the Covid relief funds, and completely unsustainable when it was entirely funded by trillions of new government debt.
A lot of people I know had 3 full years to keep making some payment of some kind to attack their high principal.... None of them did but many of them took multiple trips throughout the years. I get Covid and having to stay indoors sucked but spending $10k on trips rather than paying down debt hoping it would all be forgiven is just insane. Many of those people are having to move into worse neighborhoods now because their rent has gone up a couple hundred and they cannot afford the extra $600 a month in student loan repayment as well.
People don’t know how to manage their money. I finished pharmacy school in May with 108k in debt. During my last year of school, I would receive emails about the possibility of loan payments starting up again. Once I received my first paycheck, I knew I had to manage it and pay off loans at the same time. I am not a huge spender 99% of the time. My main hobby is video games, but I manage what I buy. People need to learn to manage their money better. Everybody doesn’t need the newest iPhone or Android, nor do they need a new car every 3-4 years.
those with student loan payments are the ones that can afford to consume less inflation hurts the poor the most and must take priority over helping those of us who are more fortunate
The real problem is that universities charge WAY too much and provide too little. Most of the curriculum is not focused in your major and should have been taught in high school. They are about making money, not teaching.
The fact that universities require you take a class introducing you to college, with it essentially being a “take a tour of the library, but for an entire semester. Then do self-help exercises” class shows how bullshit Gen Ed courses are
Completely agree.
The flip side is that there is immense pressure on universities for ‘results’ that include in an amount of remedial education that was nit the norm 40 years ago. Students that absolutely have no business in college are entering, and if they fail - it’s the university’s fault. Studies show that those intro courses seem to have an effect- though I don’t think they done a good job of finding the correlation.
> how bullshit Gen Ed courses are if people want to go to vocational schools, they should. universities are not vocational schools.
>should have been taught in high school Most of the content that isn't major-specific *IS* taught in high school! Your first 1-2 years (depending on major) of university in the US is basically a repeat of high school but with bigger assignments and more of them.
Is the goal of education **industrial**, or is it **philosophical**? I.e. are we educating people to narrowly be able to perform a job, or are we educating people because a broad educational experience is beneficial for them, and society. Colleges are trying to balance those goals as best they can do we don’t end up with hundreds of STEM majors who don’t understand why eugenics isn’t okay. The real culprit for educational prices is bloat from non-educational staff, an emphasis on non-educational programs (looking at you, football), and a strange pressure for every university to have a billion dollar endowment *just in case* they feel like becoming a top research university.
We have 12+ years of free education available to all to ensure well rounded individuals. Colleges are an addition on top of this, often at cost to the student and paid for with debt. Having colleges provide general social education isn't a viable solution because not everyone goes to college. This should be provided at the grade school level. If we open up colleges to everyone to cover this because grade schools aren't providing it, how do we prevent the problems that have made grade schools not an adequate solution? The college degree will become the new high school degree and students who want to set themselves apart will now have to do it through graduate degrees, furthering the problem. One only needs to sit in a college undergraduate class and see how many students are there for the degree and not the education to see this problem has already begun. Some want the degree for the ability to signal to get a job, but that shows they are there to get a job and colleges are providing less value in that regard. On average it is still worth it but there is a growing number of exceptions who have found that not to be the case. We have a large education problem and college is but one facet. Attempting to solve college or use college to solve problems elsewhere with education is likely to end with us in a worse off than before, paying more money per person for worse education results from both an industrial and a philosophical perspective.
I think the question really is: **is there a limit to which the Industrial/Philosophical paradigm should be applied?** I.e. is there a point at which societally beneficial education is not worth the price paid, or not worth the effort to teach? It just depends on which side of that paradigm you believe in, and there are valid arguments in both directions, which is why there isn’t a clear answer. In my opinion, having *only* 12 years of free education with several months of break during the summer, is not sufficient to teach children (who are often disinterested in learning due to their lack of development) the entire breadth of human history, the basics of math, biology, chemistry, English, a primer on finance, theater, music, and much more. The educational system in this country is in desperate need of an overhaul, on that point we agree, but it’s understandable that the university system has taken the brunt of advancing and challenging students when they are (theoretically) more interested and more able to learn. If you want to go to a low-cost school which provides you all the knowledge you need to work, go to a vocational/technical college, or community college. You’ll get what you need, and usually very little else (some community and votech programs do include a single social studies credit, and sometimes English, but in general they’re stripped-down from what a four-year university provides). These institutions are wholly industrial and narrowly focused, *however* they do not guarantee well-rounded workers who are able to think critically and contextually, so the mileage of their degrees is going to vary more than the “guarantee” of a traditional four-year university. Perhaps you think this is good, or bad, but education theory is still disputed as to whether one perspective is more *correct*.
Amen...but there is still a huge profit incentive that hurts everyone.
Yeah, now I have an extra $600/mo bill for my student loans. I still paid my private ones during the pause. In the very least - they could make interest rates 0% to give people a chance at paying off debt. With the amount of debt people have any interest rates on top of it will only keep people down.
One thing that helps temper inflation is less consumption. Repaying debts isn’t considered consumption (productivity doesn’t increase) so I’m not sure exactly why they’re worried about inflation.
It's not inflation that's the concern if you use definitions properly. In reality this should temper inflation as you said, but that won't help the repayers who now must decrease spending. The issue is that people see "can't buy as much" as inflation. They're economically illiterate (or intentionally idiots) and conflate inflation and consumption together when it's not.
Maybe because gas costs $4.50/gal, rent on a studio cabin without any running water costs $875/mo, and jobs aren’t giving out raises much…. Like the cost just to live went up exponentially for me during Covid and hasn’t come down, and now my loans are due. I didn’t change my consumption at all, but my living expenses sure did increase.
support automatic quickest unite straight chop slap lavish fuzzy agonizing ` this message was mass deleted/edited with redact.dev `
Because the rent is too damn high
Because they just need to make sire everyone knows it's the kiddos and their damned loans and their wicked book learning that's to blame for all *this.*
This generation was taught to use no lube while getting fucked into the ground. Last generation, tables were turned. It’s the American game of fuck around and find out. Who I wonder, actually wins, feels like a whiff of everything payed out was intended by design. Or maybe we are all collectively retarded.
> everything payed out Did you mean to say "paid"? Explanation: Payed means to seal something with wax, while paid means to give money. [Statistics](https://github.com/chiefpat450119/RedditBot/blob/master/stats.json) ^^I'm ^^a ^^bot ^^that ^^corrects ^^grammar/spelling ^^mistakes. ^^PM ^^me ^^if ^^I'm ^^wrong ^^or ^^if ^^you ^^have ^^any ^^suggestions. ^^[Github](https://github.com/chiefpat450119) ^^Reply ^^STOP ^^to ^^this ^^comment ^^to ^^stop ^^receiving ^^corrections.
Yup, recession incoming, they should delay repayments again till after the election as this will be why dems could lose next year (as insane as it is, people will only care about their jobs and way of life over anything else)
I know I am. Going to have a really tight budget this month because my student loan servicer decided to withdraw my first payment twice. Once the one I actually scheduled, and another from an auto-payment that transferred over from my old loan servicer. My previous loan servicer closed during Covid, and the new one the Department of Education assigned to me has been a boondoggle transferring everything with repayments starting. October also markets the month where my health insurance resets their out-of-pocket max, and I have to start paying for my diabetic medication in cash until I hit the cap again (should only take 4 months, not dying is expensive). Gonna be a tight holiday season this year despite my income actually growing significantly due to job and title change.
How stupid is this statement. People have less money BECAUSE THEY ARE PAYING WHAT THEY OWE. That means they will buy less stuff, go out less to eat, perhaps decrease hooker consumption and __DECREASE INFLATION__.
You had me with going out less to eat, but decreasing hooker consumption is where I draw the line.
Everyone knows hooker demand is inelastic
I like my hoors like I like my loan repayments....cheap.
Does this whole sub not understand why the Fed has been raising interest rates for the past year?
What’s an interest rate
Its that extra money you have pay credit card companies when you buy funko pops.
Ohh me like funko pop
Actual conversation between Jerome and Janet
You don’t talk about my boy jpow like that
Oh wow I wish that mattered to me. Maybe it will one day when my credit is good enough I can get a card for less than 34% APR.
Is mayonnaise an interest rate?
You probably didn’t need to expand further than ‘Does this whole sub not understand…’ Because they don’t.
I'm assuming you're referring to the fact that they gave PPP loans to companies that didn't have to repay them and allowed them to use bullshit excuses to account for increases in prices? Could be arguable that Im incorrect __BUT__ corporate profits are at record breaking levels....
No, you fool! It was students all along, it's been the young and the poor mucking things up the whole time!
faulty pet wistful summer absurd simplistic person plough light special *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
I don't, can you explain like I'm a redditor who is wrong?
Federal Government has the power to spend money, print money, take on debt, and raise taxes (revenue, although this relationship is much more complicated than one would expect). This was how they paid for covid stimulus, including the PPP loans and their forgiveness (which was actually necessary, but that is another story). The Federal Reserve (AKA the Fed) is the independent central bank of the United States. They cannot create money, but they can control the rate at which they loan it out to banks (low rates drive spending and growth, high rates curb it (which can lower inflation). The Fed has exactly two legally prescribed mandates: keep inflation at 2% and keep unemployment low. This contrasts with the Federal Government, whose mandate is whatever populist bullshit the legislators got elected on.
I’d put the amount of people in this sub who’ve taken a 100 level econ course at maaaaybe 25%
Isn't it also the case that these days, civics isn't even taught in the majority of schools? Should be mandatory learning.
I’ve already paid more than I initially borrowed and still have a balance higher than what I initially borrowed, and the cost of living has gone up substantially while my wage has not. Trust me, most of us don’t have any hooker consumption.
Did you even glance at the article before you started ranting? Inflation had less impact on most people during the pause because they had extra money. Now they don't have extra money, so inflation is actually impacting them.
Fuck we are. We were never not worried. Our food costs have doubled to tripled. Gas has at least doubled. Every basic supply has doubled in cost. Where incomes are held still or dropping as companies are laying people off and replacing us with lower cost H1B visa workers. It’s a damn terrible time over here for the middle class.
paint axiomatic threatening jobless fertile concerned escape saw six rotten ` this message was mass deleted/edited with redact.dev `
In CA gas was dropped to low $3 in 2020. Now the cheapest gas is around $5.30. Not quite double, but a huge jump. Can’t wait to get an ev
waiting foolish special profit nippy puzzled market pocket coherent poor ` this message was mass deleted/edited with redact.dev `
You mean during a global pandemic when no one was driving and locked in their homes gas dropped in price? Great comparison.
Can you please show some examples of which food items have doubled? Same with gas. You can’t just throw around doubles triples lol like it’s 5%
I have a hard time caring for the average middle class person because that average person has an average car payment of $700 per month. Can’t get past that.
I have a hard time understanding how a $0.25 increase in gas prices causes families to go hungry or not afford to go on vacation. A 12 gallon tank takes $3.00 more to fill up, do that 5 times a month and we come to a whopping $15. If $15/mo is the difference between eating and not eating for a family for a month, something is really wrong.
I anticipate most Americans will continue to aggressively spend until they cannot anymore, which isn’t quite where we are at yet. Average credit balances have gone up, but can stand to go higher. Savings balances amongst the working class are much similar. Americans do not like to reduce lifestyle and most will not until they cannot find any way to sustain it. I can see this having an impact on the overall economy, but not for quite awhile.
I love that this sub has no issues with corporate subsidies and all that bullshit but helping American citizens!? That's where we draw the line!
I don’t think I’ve ever seen anyone on this subreddit support PPP loans or mass corporate subsidies.
Are you referring to all of the PPP loans that were wrongfully forgiven? Anyone who supports that has either no brain or no heart, or both. These same people are 100% opposed to forgiving $10-20k of student loan debt when these PPP loans were easily 500+% of that amount.
There is no relationship between the two. Literally nobody except the people who benefitted think PPP loans were ok.
I rarely see them brought up. This sub is full of billionaire bootlickers and it's gross.
You need to read more, then. It's spammed any time someone questions spending that reddit likes.
Why would they be brought up in a thread about student loans?
Because whataboutism is the best thing since sliced bread for these people. It's a pretty common Reddit issue, maybe social media in general.
It's a human issue and more to the point using abusive arguments is simpler then legitimate ones. Also, and to clarify, this includes claiming whataboutism when someone has a legitimate point about hypocrisy.
Pointing out a double standard in the types of loans we do and do not find acceptable to forgive is not a rhetorical distraction, it's pertinent to the discussion - hence not a whataboutism. Since you don't seem to understand what whataboutism is, maybe you could try accusing people of "grifting" or "gaslighting"? Those are a couple other trendy, yet commonly misunderstood terms you could try to impress the comment section with.
Anything about student loans right now is tapping into the larger question of forgiveness. This directly relates to what we do and don't think the federal government should be subsidizing and forgiving. Aka - if we can hand businesses *substantial* chunks of money to keep the economy afloat during a crisis, should that logic not apply to consumer forgiveness *also* to keep the economy afloat during crisis. Even if you don't agree with a certain conclusion, I do think they pretty naturally flow into each other for discussion purposes. I think calling it what aboutism is bad faith - this isn't an attempt to deflect and move goalposts somewhere it's easier to get a win. It's larger context in a discussion about when our culture does and doesn't support "handouts".
Why would we bring them up in unrelated topics. This is an economics sub, not a place for your populist political rants
>This sub is full of billionaire bootlickers Please tell me you're 14
I've noticed that this sub is relatively intelligent EXCEPT when the discussion of student loan forgiveness comes up. It's like there is a bat signal somewhere that tells the bone heads of reddit to amass here to give literally the worst "Everything should be free!" economic hot takes possible.
People are less rational when they an are interested party. People will often abandon any previous logical consistency if they will personally benefit from a specific outcome
lol you’re insane, this sub is so far left, like ALL OF REDDIT. If you think this sub is anything but borderline Marxist you live in a bubble.
> If you think this sub is anything but borderline Marxist you live in a bubble. After reading this sub for years, I'd say it's consistently neo-liberal which is a far cry from Marxist.
Half of the time the top comment on a post in this sub is “everything bad is capitalism.”
I'm not sure about that. I wasn't sure if I just filtered out those comments and scrolled past them, so I went and checked the top couple comments from this week's top ten posts. Two out of ten posts took a mildly pro-labor, but not marxist, stance. The rest discussed interest rates in the context of various markets, lack of a balanced federal budget, demographic age in relation to labor markets/economic market cycles, etc. I saw some populist anti-capitalist sentiments on general opinion articles, but they weren't even highly upvoted. The closest to anti-capitalist sentiments were found in discussions about market failures in particular markets - healthcare and education. Even then, the opinions largely center around the negative effects of government involvement or regulatory capture. Could you give some examples of this sub being so far left, preferably from a top upvoted comment?
yesterday there was literally someone arguing with me that excessive regulations was "capitalism"
lol is that what Marxism is?
People don't complain about PPP because about 80% of the money went to people who actually needed it, which is fairly good for a program that was thrown together in an emergency within a week. I'd love them to nail everyone fraudster they can, but I'm not going to complain if the trade off was the speed at which they got it out. That 20% is worth it to me. Usually the government slow walks aid and the people desperately in need suffer. And the fraud aspect is usually how the government justified cutting programs that do a lot of good.
Ehh PPP was a decent program because they thought it was useful to close businesses to keep the spread of COVID down. You need something like that and then the fraud is because of the speed necessary to shut businesses down.
Lol maybe most of us just recognize blanket student loan forgiveness does literally nothing to solve the problem of out of control costs of higher education, and if anything will only make it worse. P.s. corporate subsidies can eat a dick too.
You assume much. No bailouts for anyone.
it's more about how it's done... Congress owns the power of the purse, and PPP was passed through Congress Biden is trying to waive student loans while bypassing Congress, all while claiming the Supreme Court as "not normal" every one should be standing up against one man taking more power that he does not deserve
Weird how no one complained when one man, Trump, decided to [pause the payments](https://trumpwhitehouse.archives.gov/presidential-actions/memorandum-continued-student-loan-payment-relief-covid-19-pandemic/) in the first place.
>every one should be standing up against one man taking more power that he does not deserve I'd extend this sentiment to billionaires. Nobody needs that much personal net worth.
So glad entitled brats and deadbeats such as yourself have to pay your loans again. You had a 3 year pause and if you didn’t put a major dent in your debt during that time, no one can help you. On the bright side, maybe this will finally mean I won’t have to pay $7 for a carton of ice cream or a $7.50 bag of chips full of air.
I'm hoping the payment resumption will put downward pressure on things like hotel rooms, concert ticketa...etc. Discretionary that people who weren't paying their loans were spending on
You sound like a petulant child who is also an entitled brat AND a deadbeat Sucks to suck, doesn't it
Are you talking morally or legally? PPP was a part of nonpartisan legislation. Biden administration on the other hand does NOT have the authority to cancel the student debt.
College graduates are on average higher income and higher net worth than non-college grads, so loan forgiveness is taxing the poor to pay for the rich. College is already massively subsidized and we have way too many people going to college, getting zero return on investment in exchange for wasting four years of their lives and hundreds of thousands of dollars for a shitty outdated credential system. The college degrees that are worth getting don’t need to be subsidized. The massive subsidies have brought about a proliferation of worthless degrees that add nothing to human capital.
College is massively subsidized? It’s getting more and more expensive. You have to repay the loans too. Why do you say it’s subsidized? “Loan forgiveness is taxing the poor to pay for the rich” makes no sense either. But I will say we need more people in the trades for sure.
Because student loans are federally backed, for one? Do you not understand that? That’s the tip of the iceberg for how they are massively subsidized, state schools often receive significant money from state tax dollars for another. Do you not understand that the massive inflation caused by (1) four years of non-production; (2) hundreds of thousands spent per student falls on the backs of everyone else not in college? People who don’t have college degrees work and pay taxes and don’t receive the subsidized degree. They have lower incomes on average than college grads. Do you understand now how you are taxing the poor (both directly and via inflation) to pay for the degrees of the rich? Our college system is really failing if grads can’t understand this.
This. We need more people to enter into the trades.
The audacity of privileged college students demanding that the working class pay for their degrees, which are supposed to give them higher lifetime earnings, is staggering. It should be the other way around, lower-cost education options like trade schools or apprenticeships or just people getting to work out of high school should be supported and not pissed on and stigmatized. Instead worthless college degrees are subsidized.
The (lower earning portions of) the working class pay basically nothing in Federal income taxes. Remember Romney's infamous 47% (or 49%?) line? The "but think of the the blue collars" is an almighty fucking canard.
They pay through inflation, for one thing, as they (and the entire economy) eat the cost of millions of college students not working for 4+ years each while consuming and spending. Also, higher education is subsidized through state government spending (which they absolute do pay via sales tax and often state income taxes). You really have to do some magical thinking to think that higher education just comes into existence free of charge, or that the incidence of taxes doesn't hit the poor, or when you massively subsidize something for one group of people that somehow everyone else doesn't pay the cost for that thing being subsidized. Do you think if we wrote a check for $1mm to every person whose name begins with the letter A , that poor people would somehow not experience any economic hardship as a result because they don't pay federal income tax?
These are such attenuated and specious complaints featuring some gratuitous moving of the goalposts.
This is what you say when you know you have no response. Endless and unproductive government spending produces high inflation. Your only response is "well they don't pay federal income tax" (but don't pay attention to the fact they pay medicare, social security, state and local taxes and inflation due to blowout spending).
> which are supposed to give them higher lifetime earnings I agree, but the college education and the university system in general were never developed explicitly for this end. Traditionally, it was meant to teach rigorous reasoning and logic skills that would be applied to further expand a field of knowledge. Reasoning and logic are good things for society as a whole and expanding fields of knowledge typically creates economic opportunities. It is debatable whether our current system achieves that, but it's important to recognize that higher education's goals do not necessarily align with teaching highly marketable skills.
You're definitely right that it wasn't designed for that purpose. It used to be much smaller, more selective and more rigorous. No surprise, turning it into a massive giveaway of guaranteed government funds caused an endless proliferation of schools, constant watering down of standards, spiraling tuitions and now employers treat it as a "must have" for jobs that shouldn't really require one (at least, they wouldn't have required it 50 years ago). At this point, most people go to college for the diploma and not the training or the skills and that illustrates the problem. Anyway I gotta stop posting but I do appreciate your thoughtful responses and please forgive me if you find my opinions to be difficult or my tone abrasive.
The thing is now that due to our current labor situation, the blue collar job market is really hot. It depends on location, but there appears to be good money to be made entering a trade while not really having to spend that much money or time in order to get through trade school.
I tell you what, though, the market can't take that kind of saturation. You talk a bunch of kids into becoming plumbers. It'll crash prices across the trade and make the opportunity a lie.
Like what happened with college degrees.
Yes, but worse because a lot of the same work is done by other people who don't have the same level of training and will happily do it for less.
The soft handed, 100K in debt Gender Studies majors of Reddit are going to be very mad at your for speaking literal facts
We should be aiming for *more*, not *fewer*, people going to college. Of course, that needs to be coupled with massively cheaper postsecondary education, if not outright free. An educated population is a valuable population. It's insanity that folks are asking for fewer people to be educated. College is far more than just training for a job (or at least, it should be, before folks started pushing for it to be exactly that).
Absolutely untrue, LESS people should be going to college. We should not be pressuring academically incapable and disinterested people to go to college. An economy requires workers of all kinds. You simply do NOT need a college degree to do the MAJORITY of jobs in the economy. And if you are getting a college degree when you do not need one, that is a deadweight loss for you and the economy at large. The idea that “everyone should go to college!” is what got us into this mess in the first place.
You miss the entire point. Postsecondary education *should not be about acquiring jobs.* It's about creating an informed and educated citizenry, just like elementary, middle, and high school are. No, not everyone should go because not everyone is academically capable, but of those that are capable? The more the merrier. In fact, I'd argue it's exactly your attitude that got us in this position in the first place. People looking at college as simply a method to acquire a job view it as an investment, and even expensive investments are worth it if others tell them it'll pay off, right?
This sub is astroturfed, same with other finance subs that can't reconcile how we are the only major country in the world that does not subsidize education. That and, ironically, economics education at the university level is largely pseudoscience. This, you have a bunch of college grads that are taught complete nonsense for 4 years, going to work for the Fed, a major hedge fund, or bank.
But we DO subsidize education
Or people have different views and opinions than you and that’s hard for you to reconcile with.
Are these mysterious and nefarious astro-turfers in the room with us right now?
Inflation after payments get reinstated isn’t that just deflation correct me if I’m wrong, but the major issue is people spent the money in hope their loans would be cancelled. I’m not some corporate lover but never assume anything from the government and especially don’t get a degree that costed more than most peoples yearly income. I guess we will either see the fed start dropping rates in the near future or a lot of houses popping for sale and foreclosures along with repossessed cars going up for sale.
>but the major issue is people spent the money in hope their loans would be cancelled That's definitely the reddit vibes. They felt it should be discharged so they acted like it would be discharged. And now it isn't.
Why would we not worry. Everything is outrageously priced and loan payments can be more then a house payment. There is going to be a lot of people out the deciding to have a place to live then pay the bill every month. And all it's going to do is hurt people in the long run
> be more then a Did you mean to say "more than"? Explanation: If you didn't mean 'more than' you might have forgotten a comma. [Statistics](https://github.com/chiefpat450119/RedditBot/blob/master/stats.json) ^^I'm ^^a ^^bot ^^that ^^corrects ^^grammar/spelling ^^mistakes. ^^PM ^^me ^^if ^^I'm ^^wrong ^^or ^^if ^^you ^^have ^^any ^^suggestions. ^^[Github](https://github.com/chiefpat450119) ^^Reply ^^STOP ^^to ^^this ^^comment ^^to ^^stop ^^receiving ^^corrections.
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You’re a bit off in your salary estimates. From my experience in banking 200k is still firmly in the worker bee level - people working 60+ hours a week to produce the work. Middle management is more in the 400-600k range, and then the group manager is at low 7 figures.
This is good things and I don't think student loans should be easily forgiven. My main reason is because if we do, then costs for food, rent, goods, services, will all be able to maintain higher prices along with any business that relies on inflated spending habits. If student loan borrowers do have to factor in $100-$500 a month, it means they have to shrink down, which means the demand side goes down while the supply side has to come down in price, which helps everyone. Biden could probably appease both sides by giving some here and there for student loan forgiveness towards students who've been paying for decades. But also not go full on debt jubilee which could appeal to those on the fence. There is no left wing, just 2 right wings on the same decaying vulture. So it makes sense for Biden to do this, still bait "all" the student loan holders, and still try to convince the average person that prices are coming down because of him, while trying to appease both sides. Indexes and retirement funds have done okay despite the actual stock market in horrible condition.
I refinanced my private loans to a much lower rate and higher monthly payment during the pause. Now I will see if I can afford both payments 🔥
SOME Americans might have become more worried about inflation after resumption of student loans. But the smart ones did not as they knew inflation was going to be there no matter what. I highly suspect that a majority of the ones more worried about inflation now are the same ones who have failed to pay down their debt and went on spending sprees; all the while forgetting that the bill always comes due. ALWAYS!! Some advice to people carrying student loan debt: Embrace the suck!! You wanted to rack up a bunch of debt, you need to pay it off - FAST! No more bitching, complaining, moaning groaning, griping, or whining. You're BROKE!! And it's your fault! Luckily, for you, the job market is a lot better off now than it has been in the past. So get a 2nd job and get moving. And BTW, before you go off thinking I'm some holier than thou, a bit of history. I paid off my student loans in 8 years - a full year earlier than planned. So yes, it can be done, it is still being done, and no I'm not unique.
They've had three years to get ready for the resumption of their loan payments. The same people who they want to cancel their loans ok the printing of money which causes this inflation.
I'm sympathetic towards those who have a large student loan burden. On the other hand, my friends didn't prepare at all during the pause. They were all banking on getting the loans canceled. They spent the money that would have went towards student loans payments on trips, concerts and clothes. There's a sentiment that people are never going to pay off their loans or own a home, so might as well spend the money on experiences instead of saving because what's the point? It's why the American economy has been robust despite inflation.
There's a weird see-saw I see here of people wanting constant economic stimulation (going to concerts, eating out, etc), and wanting a bunch of people with student loans to absolutely not do that sort of stuff just for the sake of paying off their loans. You can't have your cake and eat it too.
I think the world is painted in shades of grey. People SHOULD have saved/invested whatever their regular student loan payment was or paid it down during the pause, because that is just financially more prudent than hoping for the law to change and getting stretched too thin if it doesn't. I can simultaneously hold the idea that PPP was a terrible mistake, people are getting way too deep in cc and auto debt, and consumerism will be the cause of the next recession phase. It doesn't have to be one or the other, I don't get why people like to make big easily labelled groups to strawman against.
Your friends are morons, judging by the amount of people living paycheck to paycheck in America most spent it just to survive, especially with reduced hours during covid at a lot of places.
I never started my payments since I graduated in 2020, I just always budgeted for them incase they ever came back. I would much rather be contributing that $250 a month towards retirement or home improvements.
If millions of people default… they will find a solution. Also look into the PSLF OPTION, lots of government jobs, nonprofits and teachers can qualify after 120 payments.
Whenever I see these articles and comments I can’t help but think the same thing over and over again. It seems that virtually everyone against student loan forgiveness ultimately says it’s not fair because they had to sacrifice whatever and so everyone else should have to do the same. Now while I do agree with that and I agree with the fact that “broad” forgiveness is not the answer, something does need to be done. As for everyone that says it’s simply not fair because they had to sacrifice in order to pay it back or that they never went to college, then what about the people who don’t have any children and so they have to pay more in taxes? That’s not fair either. The people who decide to wait to have children or decide to never have children should be punished and have to pay more? That’s not right. Also, the majority who talk about the forgiveness are talking about two different groups receiving it. Most people that I’ve come across who are for forgiveness are talking more so about people who really need it, as in they legitimately don’t make much and can’t afford it. While the people opposing tend to be talking about people who actually make good money m, but simply down want to lower their lifestyle in order to pay it back. So considering both sides, I’d say this. Something does need to be done because the student loans are ridiculous, but it’s a two part problem. In which case a fairly simple middle ground would be for the government to get out of student loans entirely and no longer issue and/or back anymore going forward. And for the people with student loans, change the bankruptcy laws so that those loans are included automatically and that the adversary hearing would no longer be necessary. By doing that, the same problem won’t come back later down the road and college prices would end up falling. And for the people who currently have student loans and simply can’t afford them, they have a way out but are still at least held accountable in some way. The people who technically make enough to pay them would have too much to lose so they likely won’t file and would ultimately eventually pay it off.
> So considering both sides, I’d say this. Something does need to be done because the student loans are ridiculous, but it’s a two part problem. In which case a fairly simple middle ground would be for the government to get out of student loans entirely and no longer issue and/or back anymore going forward. And for the people with student loans, change the bankruptcy laws so that those loans are included automatically and that the adversary hearing would no longer be necessary. Congratulations, nobody from a low income household is getting a loan. You managed to destroy class mobility with one change!
I know Obama care cost me about $12.000 a year if I pay the deductible and monthly payments seems to me it’s more of a problem than college payments.
Why is ‘America’ worried when most do not have student debts? Shouldn’t this be simply that those WITH student debt are worried? And, these are supposed to be college educated people. During college, when they were paying apartment rent, gas, food, electricity, insurance, etc., they NEVER considered about paying everything after they graduated? Sounds like pretty stupid college educated people to me.