Drives me nuts even hearing about it. I put myself through 2 degrees, paid for it myself with no assistance, worked full time up to 80 hours a week all during it. I ended up 17k in debt. Once I graduated with both degrees, I immediately started paying back the loans, consolidated all 3 into 1, and the interest rate was 2.9%. Made the $99 payment until it was done 7 years ago. Was proud to pay it off.

Now these younger people charge up hundreds of thousands and expect the government just to forgive it? These are students going out of state instead of in state (much more expensive), not working or not hustling. What a damn joke.

I haven't read too much into it other than I hope it doesn't affect my 401k.

Another slap in the face to us on this side. I paid for my way through college and higher education. My sister's paid for their way through college and further education. Sure my parents helped all 3 of us. I paid for my son, anything beyond his partial scholarship, and he paid for his master's.
Years ago my wife and I worked at the U of Iowa. We heard from many student workers who were planning on graduating and skipping out on their student loan obligations. Some was idle talk but many were serious.
Definite difference between red and blue philosophy. One pays their way, the other believes it is their entitlement to get paid for their way!

Promoting another entitlement generation to get votes. Eventually more taxes to pay for the stupid idea.

The common thought:

For those of us who worked our way through school, it's indeed a kick in the nuts.

I was also able to pay a lot of my daughter's Ivy League college and Medical School. She still had close to $100K in loans and has paid those off.

I expect NOTHING from the Dems! Ferdt them.

I graduated a long time ago and paid my own way. 1980 was long enough ago that I don't really care. Now my son, who paid off $60K in two years by living at home, paying a minimal amount of rent to us, lived on a small allowance he granted himself, and used 90% of his salary to pay off his loans in 2 years is one pissed off MFer. We're both hoping this will not hurt our investments but who knows??? Go figure, the younger folks that paid their own way seem to be pretty upset. Whoda thunk?

quote:

Originally posted by Bytes:
I graduated a long time ago and paid my own way. 1980 was long enough ago that I don't really care. Now my son, who paid off $60K in two years by living at home, paying a minimal amount of rent to us, lived on a small allowance he granted himself, and used 90% of his salary to pay off his loans in 2 years is one pissed off MFer. We're both hoping this will not hurt our investments but who knows??? Go figure, the younger folks that paid their own way seem to be pretty upset. Whoda thunk?

Agree 100%. Basically it's rewarding people for being lazy and irresponsible.

And this will be for just what the students borrowed. Not what the parents borrowed.

To answer the question,

Real Estate prices will go up. People will have more income to put towards housing. Those who lived with roommates might now get their own apartments. Those with apartments might now buy a house. The market is already tight, increased demand without increased supply will mean higher housing costs. Net, no improvement to anyone.

Consumer spending will go up. Amazon and Apple will ring in all time highs, again. Doordash, Postmates, and other food delivery services will also reap windfalls.

Financial Institutions will also reap windfalls. Some percentage of these loans will be in arrears or will be uncollectable in the future. Those losses are built into the interest rates, so the banks are always making money. The financial institutions will be able to book those losses directly into profits, resulting in a windfall. Additionally, with the debt burden reduced, many will immediately go back into more debt now that they qualify. Companies that write car loans, credit cards, and other consumer finance will get a windfall.

Remember there are two kinds of student loans. Loans through the government, and loans from private institutions guaranteed by the government. This is important.

We already have the ten year forgiveness program. If you work for a non profit or in the service (firmean, nurse etc.) and you have made 120 payments AND it is held by the government for all 120 payments you get the remainder of the loan forgiven.

I did the math, I basically pay back all of the principal. So the government wont make money on my loans, but they dont lose it either. (I use this logic to sleep at night).

IF your loan is with a private vendor and it is but guaranteed as a student loan it does not qualify for the 10 year loan forgiveness program. (this, and not working for the right non profit / service are why so many applications for 10 year forgiveness get rejected)

My question is, what loans are they talking about, government or private student loans? Government loan forgiveness would be like a stimulus package that we already live with. But the private ones? that gets more complicated and I am not sure how they would do it.

quote:

Originally posted by Aeteocles:
To answer the question,

Real Estate prices will go up. People will have more income to put towards housing. Those who lived with roommates might now get their own apartments. Those with apartments might now buy a house. The market is already tight, increased demand without increased supply will mean higher housing costs. Net, no improvement to anyone.

Consumer spending will go up. Amazon and Apple will ring in all time highs, again. Doordash, Postmates, and other food delivery services will also reap windfalls.

Financial Institutions will also reap windfalls. Some percentage of these loans will be in arrears or will be uncollectable in the future. Those losses are built into the interest rates, so the banks are always making money. The financial institutions will be able to book those losses directly into profits, resulting in a windfall. Additionally, with the debt burden reduced, many will immediately go back into more debt now that they qualify. Companies that write car loans, credit cards, and other consumer finance will get a windfall.

And all of that will be counterbalanced by a much larger deficit. Just another stimulus package really. Inflation is the result.

And how long will this 'student loan forgiveness' last? Is it a limited time offer? Sounds to much like 'reparations' to me. Only certain people will get it and to be paid by the rest of us.

What's a few more trillion...

quote:

Originally posted by Aeteocles:
To answer the question,

Real Estate prices will go up. People will have more income to put towards housing. Those who lived with roommates might now get their own apartments. Those with apartments might now buy a house. The market is already tight, increased demand without increased supply will mean higher housing costs. Net, no improvement to anyone.

Consumer spending will go up. Amazon and Apple will ring in all time highs, again. Doordash, Postmates, and other food delivery services will also reap windfalls.

Financial Institutions will also reap windfalls. Some percentage of these loans will be in arrears or will be uncollectable in the future. Those losses are built into the interest rates, so the banks are always making money. The financial institutions will be able to book those losses directly into profits, resulting in a windfall. Additionally, with the debt burden reduced, many will immediately go back into more debt now that they qualify. Companies that write car loans, credit cards, and other consumer finance will get a windfall.

If forgiving student loans will pump up the economy, Biden should forgive all mortgages backed by Fannie Mae and Freddie Mac.

quote:

Originally posted by az4783054:
And how long will this 'student loan forgiveness' last? Is it a limited time offer? Sounds to much like 'reparations' to me. Only certain people will get it and to be paid by the rest of us.

What's a few more trillion...

I have an answer, after a trillion, we have a quadrillion.

quote:

Originally posted by FishOn:
Inflation is the result.

That’s my concern with all the government spending.

Perhaps the “stimulus” might not contribute much because I imagine that many people and businesses are suffering from lack of income due to the pandemic, but even discounting all those who aren’t paying much of anything toward their student loans, I would expect that all that extra “free” money would affect the economy. I’ve lived through inflationary times and am not eager to do it again, especially as my sources of income may not keep up with it—and certainly not my savings.

In theory, depending on where you live, you could enroll in community college, take out a 10k loan, get the loan forgiven, and quit going after the first semester. In CA, for example, you would make a healthy profit.

Student loan forgivenes/free education is an insult for those of us that paid our way, even worse for those that never went to college and now will subsidize those that do. Yes on the national debt and inflation. The real and painful cost if education is made free is the enormous army of graduates in critical race theory, gender studies, animial feelings , equity in society, crimes and atrocities of western constutional republicks, or (?) get employed in our education, heath hcare, education, military , entertainment, criminal justice systems ect.

quote:

Originally posted by sigfreund:

quote:

Originally posted by FishOn:
Inflation is the result.

That’s my concern with all the government spending.

Perhaps the “stimulus” might not contribute much because I imagine that many people and businesses are suffering from lack of income due to the pandemic, but even discounting all those who aren’t paying much of anything toward their student loans, I would expect that all that extra “free” money would affect the economy. I’ve lived through inflationary times and am not eager to do it again, especially as my sources of income may not keep up with it—and certainly not my savings.

I agree. It's coming. It would be wise to model higher inflation into your long term planning.

So they are going to ask those of us who paid our way, and those who chose to not borrow their way through school, to now pay for those who did?

Approaching peak honk.

I think the loan forgiveness will have a negative effect on my investments. Just like any government transfer program, it will require higher taxes eventually. Or inflation if they just print money.

But I am sure the effects will be much less than the costs of all the new undocumented immigrants that will be housed, fed and medicated at government expense.

I only hope that the loan forgiveness program will upset some democrats who paid for their educations, and they may consider voting for republicans. Not likely, though.

It should be interesting to see how student loan behavior changes in the future.

I believe the idea being considered is an Executive (e.g., Presidential) forgiveness of a portion of Education Department loans -- so the result is not a government "expenditure" from the budget but the loss of future revenue.

My guess is that Mr. Biden will do this for a set amount, say, something like $10,000 per person/loan. The result of the loss of that revenue? The government will need to print more money to cover it's expenditures and debt service.

It might result in higher taxes, too. I personally don't mind if Jeff Bezos and Elon Musk pay higher taxes -- companies like Amazon and Tesla don't pay much tax but don't really make much revenue anyway -- they are just pyramid schemes for investors. But I think generally higher taxes overall will hurt people in the middle and cut investments...

Like others here, what I worry about most is inflation. I remember the Jimmy Carter days... 14% inflation and 9.7% unemployment...