Student Loans: A Modest Proposal
Well, we all know what happened with the Supreme Court – they looked at Biden’s student loan cancellation program and decided (amazingly) that financial matters are Congress’ purview and that ol’ Joe was overstepping his authority a tad. OK, a few light-years. Lot of folks on the left side of the aisle, notably the Free Shit Army who want everything paid for FREE (meaning by someone else), are unhappy with this. There has been a three year moratorium while student loan payments have been suspended, and I am guessing that even if interest was put on a moratorium as well, no one wants to start making payments again.
Now the Republicans have unleashed their counterproposal to Biden’s plan:
Members of Foxx’s committee have introduced a bill called the Federal Assistance to Initiate Repayment (FAIR) Act, which would allow student loan borrowers to access affordable and burden-free repayment options, according to the text.
Among other changes, it would require the education secretary to make “at least 12 notifications” to borrowers before repayment begins — including options for repayment, the deadline and more.
The legislation would also create an income-driven repayment plan, set at 10% of borrowers’ discretionary income, and would automatically have borrowers repaying based on their income.
Interest would be paused and half of a borrower’s payment would go toward the principal for those with adjusted gross income that is less than 300% of the federal poverty line — or $45,675 for people under 65.
Me, I don’t see much light at the end of the tunnel on this proposal either. The main issues with student loans, from what I read, is a) the universities made easy loans a license to steal by raising their rates ridiculously almost across the board, and b) high compounding interest which makes them like the Mafia loans with the old 6 for 5 weekly vig. Or did we rename our government “The Company Store” at some point?
Not sure there is much to be done on the university side – if you think the local U is too high priced, don’t send your kid there – and let them know why. If attendance falls enough, maybe they’ll be forced to reprice their services. But on the interest side, The United States of Shylock has a relatively easy solution available.
Given: folks accepted those loans of their own free will – they should be paid back. What they seem to complain about most is the vig the interest they accumulate, right? How about a loan reset , recompute the loan at a modest straight-line interest like 5% or 6%, deduct the payments already made against that total, and have them continue to pay off at that rate?
You would think the payments would drop significantly, and borrowers would be able to see light at the end of the tunnel.
Those who owe millions on their underwater basket weaving degrees… well, Ron White may have already addressed them. You can’t fix stupid. But for folks who borrowed as much as a new car or two would cost, this would allow them to pay off in a reasonable time – and without sticking the rest of us with the bill.
Category: "The Floggings Will Continue Until Morale Improves", "Your Tax Dollars At Work"
Student Loan forgiveness proposal that started all of this: Seems like a common tactic – propose something that is not feasible, then blame the other side when it falls through.
i.e., “FREE SH*T! (Vote Democrat for more, of course.)”
1. All student loans will be between a student and a private entity (bank, college, etc.) The government shall NOT guarantee any type of loan.
2. Student loans will be able to be discharged in bankruptcy…just like any other debt.
PROBLEM SOLVED.
The reason the DemocRats are upset that the SCOTUS struck down Pedo Pete’s executive order to repay student loans is because the ONLY way it can be done legally is with legislation. You see, they want to buy the votes of the debt holders, but they want Pete to take the heat. If Congress wanted to, they could introduce legislation to forgive the debt except the “representatives” would have to vote to INCREASES TAXES on about 75%, at minimum, of their constituents that never went to college. People like AOC would look real bad if she had to go to her constituents in the Bronx and tell they had to ante up $5K to $10K over or more over their lifetime so some snowflake could major in Lesbian Dance Theory get high and sip Chi Tea Latte’s. No, they’d rather have The Pedo-in-Charge take that bullet. Making the schools the guarantor of these loans would REALLY reform the system. Right now, the schools give zero fucks because they get all the money with zero risk. Its no wonder higher education is a Democrats racket.
Between the GI Bill that covered 90ish % of the college, Pell grants, and two scholarships, I still had to take out three loans. (Had I been single, no kids, and had a full time job I might not have had to)
I jumped through the hoops of the “student loan repayment” effort over and over before they made any payment.
I had to fight to keep the payments going while they were stopped and the pause on interest got them paid off.
Today the costs have gone up so much I would have needed three times what I borrowed then.
One of my so called “benefits” of joining the Army and going to
Viet of the Nam was that the VA would loan me money to go to
school should I return alive. So I came home and applied for
a VA student loan which was no different than applying to a bank.
I went to school and paid back the loan which was no different
than paying back a bank.
I now realize that not only did I not need to join the Army and go
to Viet of the Nam, I could have borrowed the money anyway
and not even have to pay it back at all.
And people wonder why I’m such an angry old man.
“the VA would loan me money to go to
school”
“loan”???
Man, your recruiter really screwed you; the rest of us got payments, not loans.
Plan: 1. Get loan, 2. Pay it back. (How “racist,” right?)
Democrats would bring back debtors’ prison if handing out Free Sh*t weren’t in their interest.
The racist part was actually paying it back with “government” funds. Since Rich White kids go to college twice the rate of black people, poor black people would be paying off student loans for rich white people.
I have a plan. Join the military reserve or the National Guard and get $50,000 paid throughout your service life for 6 years. Alternatively you could join the active duty and get $65,000 for only serving 3 years…. This will pay off loans for about 80% of the people. Not only that but you can still get the GI Bill and may be a cash bonus.
Oh wait, this already is a thing.
It would be a wonder if 20% of those with outstanding student loans would be qualified to serve in the military.
Generally college students and graduates fall into the 50-60% qualified to serve. They ordinarily graduate high school with the ability to read and write on at least a 8th grade level. Half of all American’s can’t read on an 8th grade level making it very unlikely to pass the ASVAB.
Very few college students also have a felony record or DV conviction, compared to the rest of the population. Most with college students it is flunking the physical with drugs, mental illness, or other ailments.
“drugs, mental illness, or other ailments”
This was my main concern.
Mine too, but I got through Boot Camp anyway.
Democrats shouldn’t be surprised, and should only blame themselves. They had control of the House and Senate a couple of years back and made no attempt to introduce a bill to resolve this issue.
(Just an observation…)
My schoolin’ came from a private company- my end was to buy the books and maintain a B average. Y’all still got to pay Airplane U for it, ’cause now the company charged the Navy more for my essentially unchanged services.
I was silly enough to think some of that was due to me. The company and I parted soon afterwards.
This is a gift from the clinton administration. IIRC he was the one that proposed college affordability for all by initiating the federal student loan program. What he, and others who do not understand a free market failed to realize, is that the universities were already on the federal feeding trough and understood the money pipeline being installed. Once the money started to actually flow, the prices of an education skyrocketed way beyond the inflationary curve. I believe it was the fastest rising price of any commodity.
This was a predictable event, yet economics are a giant black hole in democrat comprehension.
You compound the money infusion with the university understanding their audience by making up multiple majors and minors to attract students like flies on crap. The new “studies” lack any means of being profitable for the students is immaterial. They are fallowing the mantra of college is necessary to obtain a good lifestyle. Of course they ignored the idea that a good job must be available because of their major and the education must prepare them for an actual job, unlike basket weaving or women’s studies.
Howie Carr Radio Show out of Boston was talking about this issue last Thursday when a listener called in. She admitted she signed for a relatively high-interest loan of more than $70K for a degree in Political Science and complained how unfair it is that she now cannot find a paying job in the field she studied so she cannot afford the interest on her loan and it would only be fair to at least make the loan interest-free.
Howie educated her (better than the college, I suppose) that it was her choice to take out the loan and spend it on a degree that would provide no useful income, and how would it be fair to anyone else to be expected to pay for the loan she willingly signed her signature to?
That’s another side to the problem. Not only the excessive costs of the education, the excessive costs of the interest to pay for the education, but college students spending all that money on literally useless degrees because it sounded good when they talked to their college counselors.
Another issue is all the degrees related to diversity issues. They graduate, then sign on to companies all to willing to appear concerned about diversity and by creating a program they appear committed to it. Then, the hammer needs nails, so there is actually a market to create problems that don’t exist to a large degree, so that the program can exist and thrive. It is a self-licking ice cream cone that perpetuates a need for itself. This is what drives the division you see nowadays, IMHO. Then, there are books being pumped out on the subject.
No doubt she was advised to “follow her passion”, and that was to get a job making rules for other people to follow, hence the Political “Science” major.
Here’s a more modest proposal. Get the government out of the business of sticking their nose in other peoples’ private agreements. If they don’t like what’s going on, legislate in behalf of future contracts.
I seem to recall the government doing away with the private lenders and becoming the defacto bank as far as student loans are concerned.
I’m sure somebody will be along shortly to correct my understanding of this or point out if I’m wrong or slightly off track. I may even be completely off the rails too.
But I agree, the government needs to be in the background of our lives and not in the forefront.
I recall there was a Congressional Hearing sometime in the last year or two. The CEOs of three large banks were called before Congress and one Democrat Representative began her questioning with what I’m sure she believed was the ultimate ‘Gotcha!’ question; something along the lines of, “How many student loans has your bank backed in the last five years and how much profit has been generated in interest?” I believe her intent was to shame the bank execs with how much money the interest payments were putting in their pockets.
The first CEO replied, “My bank has not backed any student loans for fifteen years, ever since the US Government took the industry away from us.” The other two CEO responded similarly. They made that Representative look like an utter fool to not know it was her own government that was issuing the loans and interest rates she was on hand to complain about.
Ahh! Found it! https://www.washingtontimes.com/news/2019/apr/10/maxine-waters-goofs-grilling-banks-student-loans/
I have to thank our beloved founder, SFC Lilyea, for introducing us to the aptly named Free Shit Army. Our current regime is determined to recruit with more giveaways of the tax collars they collect from us
“tax collars” I have been wearing one of those since the very first paycheck I ever earned.
Yep…And now they’re trying to add the ball gag to go along with the collar! The whip they already been using…it’s called “withholdings”.
An IRS audit is a cat ‘o’ nine tails.
https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.youtube.com/watch%3Fv%3DRc-3NoLZPeA&ved=2ahUKEwi-3qXTwvr_AhXjmIkEHcZED8gQwqsBegQIGxAB&usg=AOvVaw16FWbS43BYJD4HldZH54ki
Nothing really to do with student loans per se, but a warning about government getting too big and how they go about doing it.
Paul Harvey was way ahead of his time in foretelling this, and the guy listening to the video is waking up and wondering why none of this was taught in school.
An interesting listen.
The meme at the top sums it up very simply. “You took out a loan.” “[YOU] Pay it back.”
The best learned lessons are the hard learned lessons. You want fries with that?
Absolutely too lazy to look this up, IIRC: 1990s-mid 00s
‘Healthcare’ was going up ~7% per annum (averaged) with the next highest thing ‘Higher “Ed”‘ at about 5%.
Can’t afford free lunches, especially if that b*tch Uncle Scam is involved.
On this episode of Everything the Government Touches Turns to Shit, the idiots that spend 12 years in government schools decide to harm their future savings potential by taking on debt in furtherance of the same type of failed ‘education’ because they don’t understand; inflation, interest rates, or value.
I ain’t paying and you all can GFY.
If we continue to distort this market place, we will not have appropriate feedback. And corrections, like what is currently occurring, rips everyones teats off.
WELCOME TO ADULTHOOD, MFers!
Sadly, there is some truth in that cartoon.
And debt to go with it. Better get sweeping.
“…and, no, you can’t work from home.”
“allow student loan borrowers to access affordable and burden-free repayment options,”
Why?
If they are (allegedly) smart enough to get into college they are smart enough to understand what a “loan” is.
On the other hand, if they make the colleges co-sign the loans, I may go for it.
I may add, actions:
UConn President Radenka Maric’s base salary of $631,350
might just have consequences:
Hackers claim responsibility for sending hoax email claiming UConn’s president had died
Not advocating the actions, but I find them slightly amusing.
Happy hunting to the LEOs in finding these rapscallions.
I used the VA Bill to go to Apex Air Conditioning school after I got out then got a new job in 1970 for 37 years. Also went to DooWopp University but didn’t cost a cent but only a hoarse voice.
I agree with the OP that schools did not control costs well (costs exceeded inflation by significant amounts) However, it might not be solely the schools issue. For public colleges, what percent of their budget is actually provided by the State and what had to be made up in tuition/fees to cover the remainder.
At least in one State for their institutions of higher learning the State only provides ~8% of the schools budget and the schools have to cover the rest of the nut in charges to the students in the form of tuition/fees, etc. Historically the State provided a higher percent of the budget but that has dwindled over the decades.