The Joe Biden Presidency I :: Hallelujah!

And that's just it, my colleague and her daughter could pay off right then, but effectively weren't allowed to. My colleague was infuriated with the system because it ensured she and her daughter were spending most of the money paying interest. That discussion with her made me more understanding and sympathetic, especially given the relatively high interest rates of some student loans.

 

I just think of the loan forgiveness as similar to a de facto Pell grant, just one that is given later.

I think making college more affordable is step #1. It's outrageous that, based on the annual budget of tuition + cost of living, it is cheaper for students to attend the University of Otago in New Zealand as international students paying international tuition, than it is for the students to attend the University of Washington in Seattle as resident students paying in-state tuition. The system is broken.

 

A friend was complaint that he has paid like 500 a month for 10 years for his kids loan which was 100K when it started and they just told him, he has only paid 56 dollars of the principle. He is trying to get on the phone with someone.

I owe 120K and have never made a payment. Once I make a bunch of money in the next five years, I will pay it off.

 

Please compare the value of Pell Grants vs college costs today vs 40 years ago.

This is such a basic fact about this debate; the reason student loans are up is because the value of Pell Grants are down, and also college costs are increasing much faster than inflation.

 

OT: I've been reading a bit on Claibone Pell and come away to respect him. Came from serious money but never boasted about it, lived like an everyman, the obvious creator of Pells grants, helped create Amtrak, and voted against his party on DOMA and other bad legislation. Also, what a character. Gotta respect someone who takes a lit cigar from Fidel Castro. Or jogs in tweed suit jackets.

 

One of the things that really needs to be looked at, and this is something Tom Nichols has mentioned (And something the likes of our faculty posters can provide insight into), is the hiring of admin. Nichols mentions that admin bloat is a problem and is one of the reasons why college tuition is going up.

From personal experience, I know my tuition went up when the board of my school voted to give the Dean a $100k pay raise in 2008 which was one of the reasons faculty went on strike. Should also mention that this was right in the midst of the Great Recession. Or that faculty was getting their pay frozen.

 

Not only admin bloat, but the salaries of the top admins have skyrocketed

 

Well more failed CEOs and politicians are joining so they don't want a pay cut.

 

This is what should have been done IMO. I couldn't believe what I was hearing when I first heard Biden would be forgiving student loan debts. Its like giving some people a free BMW while letting others struggle to pay for a used Chevy Malibu, all based off of the luck of when you got your loan and how responsible you were in terms of making it a priority to pay it off (with the least responsible ones rewarded the most). Except its worse than that because your level of education impacts you financially for the rest of your life.

At least if they relieved people from having to pay interest, the debts would be manageable and it remains fair (people still pay for what they decided to buy).

Agreed. And while that example seems very particular and probably not super-relatable, you can flip it around to say Family X wanted to buy a house when they entered their thirties but were saddled with student loan debt and therefore will be renting for the rest of their lives. While Family Y born a few years later gets to buy the house.

 

We had a similar discussion over here in the 2017 election...

https://www.theguardian.com/educati...corbyn-denies-promising-to-wipe-student-debts

Jeremy Corbyn has insisted Labour did not commit to wiping graduates’ student loan debts during the general election campaign, after Conservative MPs accused the party of knowingly misleading students.

The Labour leader told NME magazine during the election that he would “deal with” the huge debts acquired by graduates who had paid high tuition fees, as well as abolishing fees for current students.

“I don’t see why those that had the historical misfortune to be at university during the £9,000 period should be burdened excessively compared to those that went before or those that come after. I will deal with it,” he told the magazine.​

However, Corbyn told the BBC’s Andrew Marr Show on Sunday that was not a commitment to write off the debt, currently more than £76bn owed by English students and EU students studying in England. “I didn’t make a commitment to write it off because I couldn’t at that stage,” he said.​

Of course, he couldn't possibly be our prime minister because he described someone as a friend that nobody likes, (albeit in the context of trying to bring about an agreement between 2 warring parties), unlike the previous guy who couldn't be prime minister because he looked funny eating, (of all things), a bacon sandwich.

Anyway, the point is that student debt has long been a political test of values and, IMO, it's not quite as simple as saying it should be done with the position as it has been in the past because student debt provides an extra value to an employee going forward that hasn't been given to many poorer people. If they had been given extra training in various trades then I think it's unarguable as ALL debts could be forgiven or, at least, reduced.

But as it is I don't think it's fair that taxes paid by people on lower wages should go towards people who earn more to pay off debts that went towards their value as employees unless there's some special value to the society, (i.e. nurses for example).

Of course, that is all APART from any structural issues around the way those debts have been designed, (i.e. payment of debt with no possible reduction as someone mentioned). That sort of thing should never have been allowed in the first place so it's quite right to get rid of it.

 

Strangely enough, tuition hasn't increased in some cases as much as I thought. My first semester tuition (which was in 1982) adjusted for inflation comes to $4500. Today's tuition at University of MD tuition was $5750.

 

The Lawyers, Guns, and money blog has a couple of writers who make these points incessantly. In particular, Paul Campos writes about the law school scam, in which lowest tier law schools’ graduates have a hard time getting jobs that have a chance of paying off their student loans because the US produces more lawyers every year than it needs. He has convinced me that the bottom 5-10% of law schools are only slightly higher class versions of Trump Universoty.

 

Last year, fall of 2022, I got curious about this. UNC’s website has tuition and fees for every semester going back ad infinitum, so I was curious how many hours at the minimum wage did I have to work in Fall 1982 to pay tuition and fees. It was about 110 hours.

Maryland is one hell of an anomaly, and good on them.

 

I believe you used to be able to pay off student loan balances early if you could/wanted to. In the 90's my parents inherited some money and since me and all my sibs were making loan payments, my folks used some of that to pay off our debts in full.

And it is ridiculous how the costs of tuition have skyrocketed over the past several years. One factor is that places like Boston U (and certainly a lot of other places) have built new dorms that are more like luxury apartments. Back in my day (harumph! Git offa mah lawn), a standard dorm room was a 10x10 cinderblock room that you shared with someone else. That was a big factor in me getting an off-campus apartment where, even in a "budget" (i.e., crappy) apartment, you still had more room and weren't subject to dorm rules like closings for vacations, etc.

Oh yeah, McGill U, one of the most prestigious universities in the world has lower tuition for an "international" student than they would pay for the in-state university. If you are a Quebec resident, it costs about C$6,000 a year. Students from other parts of Canada pay about C$11,000. Must be because the People's Revolutionary Socialist Republic of Canuckistan believes that if you're smart enough to get into a top university, cost should not be a barrier to attending.

 

That is an amazing deal.

 

That is the case with a lot of loans? I know my mortgage is structured in a way that the interest payments are front loaded, while the principal is back loaded. IE, when you look at my payments it says $X,XXX to interest and $Y,YYY to principal and my interest is higher than my principal. I can make a double payment to my mortgage with the second payment going to my principal.

 

You don't designate what goes towards principal and what goes towards interest. Just about any loan you have calculates the interest you have on your outstanding balance at any time of your loan. That's why the portion of your loan payment early on has a larger portion of the payment allocated towards interest instead of principal. Someone else can post a loan amortization table which explains this more clearly.

 

Yep, totally rigged system. The difference that one pays for a 15-year mortgage versus a 30-year mortgage is no joke and makes me wonder why so many people choose the latter. I know it lowers the monthly payment but better to lower your expectations/live in a shitehole for as long as you can tolerate then trade up.

I mean, you are probably gonna have to upgrade in way less than 30 years anyway (as family members, junk and expectations tend to increase with time), so might as well have a good chunk of the principal paid when you do.

 

Not disagreeing with you on how loans are calculating, just how my mortgage lists my payments. Let's use my credit card bill as an example. I make a payment against my CC and my CC balance drops by an equal amount, but at the same time, interest rate increases my CC balance by a percentage. If I make an extra payment to my CC, I don't need to designate that I want it against the non-interest portion of my balance, I just say I want it against my CC balance.

Now, with my mortgage, it specifically says I paid X against my interest and Y against my principal and if I make an extra payment, I have to designate that I want it against my principal.