Post-SCOTUS Decision, Biden Cancels $40 Billion in Debt

The student loan program is a great example of how a good program can have grossly unintended consequences when the greedy find ways to exploit it.

I fault congress for not following this program as it evolved and not taking any corrective actions along the way. They were all probably too busy pandering for campaign donations and their assigned fund raising duties for their party’s.

My first inclination is to say that I worked my way through College and paid for most of it myself (one quarter was funded by wedding present gifts). I married over the summer after my second year and our first child was born a year later. In order to complete a five year program in four years, there was the quarter from hell, where I took seven 3 quarter hour credit classes in my major, worked three part time jobs and had a newborn and wife to attend to all at the same time. I learned how to go without sleep that quarter. Looking at today’s tuitions, I realize that even with that sustained level of effort, I would not have been able to pay today’s tuitions nor living expenses.

So what went wrong?

The first thing that went wrong, was that many of the loans had a guaranteed principal that was shielded from bankruptcy protection, and that  gave lenders little to no incentive to counsel borrowers about whether or not their course of study would allow them to find employment able to repay these loans. There was no counseling regarding the interest burden which would accrue, particularly with variable interest rates and late payment penalties. 

Secondly, these loans were offered directly to high school students heading off to college with no required parental involvement. Most had little understanding of what impact taking on large debts would have on their lives, because of the false promise that any college degree would automatically ensure financial success.

Finally, the Universities saw then influx of money from these loans as an opportunity to raise tuitions and to raise them dramatically year by year. In order to complete multi-year programs, the students had to borrow much more than expected annually in order to complete their degree programs. To bail out the program would be to lose the ‘investments’ that they had already made, with a lingering debt that still had to be repaid. Some private organizations were outright profiteering be these means.

The student loan program gave the opportunity for banks to lend lots of guaranteed principal loans to naive students. The Universities found a source of funds to upgrade their facilities and incentivize their staff. The students paid for all of this by taking on huge debts, because once the cycle started they were entrapped to continue or lose all that they had already committed to.

The Congress failed these borrowers because, if they had monitored this program, corrective actions could have been taken such as mandatory debt counseling before giving loans and limiting the ability of Universities to raise tuition more than COLA rate for student committed to two or four year degree program.

The failure of our government to monitor this program and take corrective action for the student borrowers abuse by lenders and providers,mandates corrective actions. I think that the Biden plan is thoughtful, far reaching and strikes a realistic balance between those that say ‘hell, no’ and those that say ‘not enough’.

The other corrective actions in this legislation will do a lot to prevent much of the financial abuse fostered on naive student borrowers in the future.

I do think that more relief will be required for those of limited income and that this and future reliefs will be a sound economic investment in economic future of this country - just as the part of the PPP funding that was not directed to Congresspeople’s benefactors, was a solid economic investment in our country’s future.

Step in the right direction but the whole student loans program needs to be reformed as it is:

1) no longer a fair lending program like it was initially

2) college and university education costs need to be affordable especially in institutions receiving tax dollars.

My 1st student loan in the 1970s came with a coupon book which each payment was for a fixed amount with fixed interest at the prime rate. It took 10 years to pay it off but there was a clear end to the loan. College tuition went from $300/credit hour to $700/credit hour during a 3 year program and there is no choice but to pay the increases to receive the degree.

My 2nd loan for a smaller amount accrues interest that gets added into the balance so interest is being calculated on interest like a creditcard. Luckily I've used corporate tuition reimbursement to finance most if it but I can see how someone who doesn't have access to tuition reimbursement programs could run up some large balances because:

1) the total amount of the loan is an unknown

2) total amount of interest is unkniwn

3) there is no credit check to see if people will be able to pay it back 

4) colleges & universities are increasing their tuition rates while the student is locked into the program. My 2nd loan the cost per credit hour changed, as well as how many credit hours each semester is.  Plus a year is now 4 semesters and no longer 2.

The way student loan programs are now they are a moving target that enables educational institution to increase cost/credit hour, credit hours/class, and credit hours to graduate.

We're not going to listen to the people complain about how this increases the national debt or falls on the taxpayers.

If you don't support raising taxes on the wealthy and corporations and fully staffing the IRS to collect those taxes, then you're the reason we have such a high national debt. We can afford this if we collect what we are owed.

When you put aside all the bullshit, look at actual facts, follow the money and who profits from the current structure of the student loan program, a fundamental issue is being ignored by both sides. The majority of the current problems with the student loan programs can be traced back to changes made under Ronald Reagan and Newt Gingrich. 

Yes, the government does have the authority to forgive debts owed to it, just like it forgave $700 billion in PPP loans from US businesses during the pandemic. At least 20 million Americans are going to directly benefit from this single action, and all are lower-class and middle-class Americans! We should all be celebrating for our fellow Americans, y'all! It is unfortunate that a "Me Not We" culture is still so pervasive across Americans' mindsets. Please understand this fact: 20 million Americans now have an extra $10k-20k in each of their pockets to spend on food and bills, which puts more money into our country's economy, boosting GDP! This benefits all of us in the long-run when so many of our fellow Americans can start their own lives and families with a smaller burden of debt. And to everyone still screaming bloody outrage over student loan forgiveness: Where was all this outrage when the government canceled over $700 billion in PPP loans to businesses across America that benefitted even the rich? Would you also say it was that people should not get the COVID vaccine because it be unfair to the people who died before it was released? Whataboutism will kill us all in the end if we continue to use it!

Student loan program changes under the Reagan Administration (1984)

"During Reagan’s two terms as president, dedicated funding for outright grants-in-aid decreased, federal guidelines pushed individual loans, and private bill collectors were brought in to ensure that the hardest kind of debt to escape was whatever you took on for your education. Even more important was the shift in tone and expectation. Public goods became private services, and by the end of the 1980s, the anti-tax, infra-structure-starving, neoliberal Weltanschauung meant that as states cut their budgets, support for higher education was thrown into a cage match with every other necessary public good."

https://www.salon.com/2014/07/05/ronald_reagan_stuck_it_to_millennials_a_college_debt_history_lesson_no_one_tells/

Ronald Reagan stuck it to millennials: A college debt history lesson no one tells

Dramatic, awful changes occurred on my generation's watch -- and it amounts to a fiendishly success...

https://www.salon.com/2014/07/05/ronald_reagan_stuck_it_to_millennials_a_college_debt_history_lesson_no_one_tells/

I feel education is way too expensive in America!  That is what we need to fix.  This is a band aid on a gaping wound.  However, it is nice to see the poor get a break for a change instead of the gazillionaires.

Most naysayers here got pandemic assistance checks & substantial ppp loans forgiven 

You have no right to opine in the negative And if you insist then first return all those funds!

Having been born in 1948, I remember when attending a State Community College as a citizen of that state, there was no tuition, just books, and lab fees. The same held true for State 4-Year Colleges and Universities having very low tuition costs for citizens of that state. 

I am 100% in support of student loan forgiveness as proposed by President Biden. Student Loan programs have allowed higher education to become a money grab that results in college graduates being rendered, by debt, unable to participate fully in our economy. This is truly a "Catch-22" that attracts young people to borrow to achieve their personal and financial goals and dreams, and in the end, the debt load stymies the graduate's ability to reach those goals and dreams.

I support the concept of reactivating the Selective Service program, redesigned to not focus on military-only service but to include credentialed NGOs and Community Service Organizatins where a young person can complete service to this country while earning credit for traditional higher education or attending a trade school (this would include a tool kit for the trade studied).

I am in a unique situation where I am afforded the opportunity to speak to high school juniors and seniors. A very consistent theme when I ask what their plan is after high school is the answer, I don't know what I want to do." The above-mentioned Selective Service Program would afford the recent high school graduate the two to four years of exposure to career concepts they had never considered. For those who have a career goal, such as in any segment of the medical field, to be able to contract with a state entity that will cover the tuition in exchange for the student's commitment to remain in a career position within that state irrespective of private or community hospital. 

Predatory lenders preyed on those that do not have Daddy's money to go to college.  Those lenders were not regulated as they should have been like banks and other financial institutions. The compounding of interest in strange forms, preyed on the ill-advised and took advantage of POC. In some cases, the students were defrauded. President Biden is doing his best to allow our younger generations to rid them selves of lifelong debt. We need our younger generations to participate in such things as buying a home. Something those with " Daddy's money" never had to worry about. Homeownership helps the economy with new construction that brings jobs and home repairs that brings more jobs in retail and etc.  Homeownership looks forward to family wealth. Something indigent and POC are sorely behind in . 

It's a loan and should be paid back. It is not fair to many other who paid theirs back in full.

X

This is unfair to all the people who paid off their student loans already. This is unfair to the overburdened taxpayers who are told to fund this boondoggle. This is unfair to future generations who will eventually have this additional burden put on their shoulders.

I just don't understand how this lunatic president has the right and authority to write off debt that we, as taxpayers will eventually have to pay for? This is nothing short of redistribution. THAT'S SOCIALISM. Plain and simple. He has shown himself to be the absolute worst president in modern history. The border is completely open, gas prices are still over a dollar higher than when he took office, the economy is in shambles and he's bragging about how great things are. It's pathetic. He's completely out of touch. Now he's buying ballots by promising to cancel debts. It doesn't get wrote off, someone has to pay it off. That's us, the rest of society that takes responsibility for OUR LOANS! This is sickening.

Yes~

Joe buying votes. Again.

President Biden does not have the authority to act in this manner. It will be overruled again.

When he had Congress and Senate and could not get them collectively to act there is not political will to stick elites college costs on Blue Collar workers.

Not really sure how I feel. I am 74 and paid off my loans years ago by doing without. Some could use the help many do not deserve it. Colleges need to stop forcing students into debt we cannot afford. The entire system needs to be fixed.

he needs to cancel it all, including the private loans.. fortunately I've paid my loand back.what these banks have done to student in recent years is just criminal!! the banks along with the colleges should also be held accountable for this mess. 

Even loan sharks give better rates 

This is better than nothing which the Supremely Catholic Court tried to force on the Biden Administration.  But it is only one-tenth of what President Biden had planned on...

The whole educational system in this country needs to be revamped to fit the modern needs of the people.  A study should be made to ascertain the pros and cons of other country's version of education since they have been at it longer.  Based on the findings, a well regulated plan should go into effect.  A good, well rounded education is a must for any country's servival and growth into the future.  God only knows how badly we need teachers and medical professionals and should be encouraged throughout the basic education of all students.  The government is and shouold be held responsible for education, health issues, and the well being of ALL its citizens.  The greed of the "power mad" can go "back off in their own jack yard" as far as I'm concerned.  Anything that can help those who are trapped by educational debt is acceptable in my eyes just as long as the wealthier among us pay their fair share into the tax base to support the education along with the health and well being of the masses.

My own son who is approaching his 56th birthday has had his tax refund taken from him over the years up to the COVID "situation" without any paper work informing him of where exactly those dollars were aimed.  How much went to principle and how much went to interest if any.  There is every chance in hell that he will lose some of his social security when he retires which he has been paying into since he was 16 years old.  And his debt is over 20 years old.  Top that off with the fact that during his last year he  and his class mates did NOT have a qualified instructor for one whole semester yet they were told they would graduate anyway.  He doesn't even use his education in his present employment all that much and what he does use is his "wood shop" classes from middle school and high school.  Thank the "powers that be" he has been blessed with a carring and understanding boss who offers health insurance and allows for time off to be my care giver not to mention his own health issues.  

And to think our own "law makers" don't give a damn about anything other than their big money donors to their political party and retaining their position and campaign.  We the voters are the ones taken in by their rhetoric fed to them by their political cronies.

Joe is not authorized to do this!!! I guess it makes a Thief feel a little better when he steals from the USA Taxpayers to.buy votes from these people who sign for these Loans then think they are entitled to have fellow Citizens who either Paid their Loans or never took Student Loans or the Privilege of going College. I thought Joe was going to be impeached!! And when will we ensure that our Laws make it EASY and Fast to Criminally Prosecute and Imprison Politicians who Rob, Steal, Lie and Mismanage the People's Business like Joe and many others do?!!!?

God Bless The USA

Thank you President Biden, but we need more...much more.

Ok so who gets to pay for all that?

Why should all of these deadbeats get a free ride when I paid back EVERY PENNY of my student loans WITH INTEREST! Not only did I pay back MY loan, now you want to take MY TAX DOLLARS to pay back the loans of thousands of deadbeats in addition to my own loan? Not if I have anything to say about it, sweet cheeks! You take out a loan, you pay it back! That's how the "real world" works! Not that fantasyland on your campus or in Washington, DC! If you don't pay back your mortgage, the bank takes the house! Ditto your car loan, moron!

The worst part about all of this is it fails to solve the fundamental problem of high college costs! If you really want to make college cheaper, how about firing all of those "middle managers", the Deans, Assistant Deans, Provosts and other assorted "hangers on" who exist solely to mine the Federfal Bureaucracy for loans, grants and other finacial aid, which just goes to pay for ever more bureaucratic leeches feeding at the public trough!

So, it sounds like President Biden is going back on his word that he gave during the Inaugral Convention.  That's too bad.  I though we were getting a 'different' kind of President.  One that would not resort to going back on his word.  One that would not lie to, in this case, the Students of all kind (black, brown, old, young, foreign, citizen, etc.).  Just when it looked like there was a bit of light at the end of the tunnel, he turned the light out.  That's too bad.

This is unacceptable, they choose to go to school knowing it was expensive. I had to pay my way through school. This is wrong because me as a taxpayer has to foot the bill. I am sorry they need to get over their need to have everything done for free! They are not entitled to everything. I had to work, go to school, raise my children. Nobody did that for me. Sure I got help with childcare but still I paid my way. It was hard being a single parent. I survived and a better person for it. 

Fix the system. Limit college tutions. Fix the lending process

Stop giving away other people's money