Would forgiving something like 2 Trillion in Student Loans be Inflationary?

[bendog]

Student Loan Forgiveness Is an Idea Whose Time Has Gone

Student Loan Forgiveness Is an Idea Whose Time Has Gone

www.bloombergquint.com

OR

Is Student Loan Forgiveness Finally Coming? Here’s What We Know for Sure

Separating the facts from mere speculation and rumors about debt cancellation.

www.chron.com

Since people aren't making the payments now, I don't see how forgiveness would add to consumer demand. But it would increase the overall debt if the govt would just assume the "dollars." But the fed is trying to reduce consumer lending without killing corporate ability to raise private loans with issuing bonds. The Fed CAN raise the amount of funds banks hold and that takes money "out" of the economy.

so, and this is jmo, anyone taking on debt to buy a new boat or car or whatever that they don't REALLY need is absolutely NUTs given the economy and Ukraine. Seinna tells us we can't raise taxes even a few %pts on people making 500K a year. IF someone can show they're working 40 hours a week, kill the loans. Maybe they'll do the sensible thing and put anything extra in the bank, or godforbid get married to somebody and someday buy a house with 30 year mortgage and have a kid.

 

[Damaged Eagle]

How about the government just get out of the business of issuing government student loans and let the universities take the risk?

If that education is such a great education the university can guarantee it or your money back..... or perhaps the university can sell insurance to the students.

*****CHUCKLE*****

 

[BluesLegend]

Would forgiving something like 2 Trillion in Student Loans be Inflationary?​

Is government going to borrow 2 trillion to cover the cost? Well there you have it.

 

[BackAgain]

Is government going to borrow 2 trillion to cover the cost? Well there you have it.

Borrow. Or print. Or maybe now that’s just two ways of saying the same thing. And yes. It is inflationary. Obviously.

 

[BluesLegend]

Borrow. Or print. Or maybe now that’s just two ways of saying the same thing. And yes. It is inflationary. Obviously.

PLUS it doesn't address the underlying problem, sky high tuition costs fueled by government backed loans no student would otherwise qualify for. But because student loans is a Dem money skimming racket Dems won't lift a finger to fix the real issue.

 

[bendog]

PLUS it doesn't address the underlying problem, sky high tuition costs fueled by government backed loans no student would otherwise qualify for. But because student loans is a Dem money skimming racket Dems won't lift a finger to fix the real issue.

Well, when was the last time any of you went to college without the govt subsidizing the cost?

I'm not saying that the student loan system is not misusued it is. But the lenders are profiting.

 

[BackAgain]

PLUS it doesn't address the underlying problem, sky high tuition costs fueled by government backed loans no student would otherwise qualify for. But because student loans is a Dem money skimming racket Dems won't lift a finger to fix the real issue.

Yup. These esteemed educational institutions couldn’t possibly get away with charging the enormous amounts they charge their “customers” if only a relative handful could afford it. So, this educational loan malarkey is obviously part of an ongoing scheme. Hook the students with loan money (like drugs to addicts), and then the schools can charge as much for their “services” as the unwary buyers can be convinced they now can “afford.”

And before that fake cornucopia dries up (when people realize that straddling students with massive debt at the very outset of their productive working lives is a very bad plan), then cover their debts with public funds. (Hey look! “Free” education!)

 

[1srelluc]

I've read where it will drive both home prices and rent higher.

Young couples with SLD that are suddenly freed from it would look to better their accommodations.

Deadbeat singles living at home would be freed-up to rent a place of their own.....Well maybe.

Supply could not keep up with the demand thus the competition would drive prices up..

 

[BluesLegend]

Yup. These esteemed educational institutions couldn’t possibly get away with charging the enormous amounts they charge their “customers” if only a relative handful could afford it. So, this educational loan malarkey is obviously part of an ongoing scheme. Hook the students with loan money (like drugs to addicts), and then the schools can charge as much for their “services” as the unwary buyers can be convinced they now can “afford.”

And before that fake cornucopia dries up (when people realize that straddling students with massive debt at the very outset of their productive working lives is a very bad plan), then cover their debts with public funds. (Hey look! “Free” education!)

Then convince the students to vote Dem on the chance of getting their debt wiped clean. Dems are evil.

 

[Papageorgio]

Well, when was the last time any of you went to college without the govt subsidizing the cost?

I'm not saying that the student loan system is not misusued it is. But the lenders are profiting.

Aren’t lenders supposed to profit? If they don’t, why lend money?

 

[BackAgain]

Then convince the students to vote Dem on the chance of getting their debt wiped clean. Dems are evil.

Feed the addiction. Create the dependence.

 

[blackhawk]

Here is a novel idea not just for students but everyone don't take out a loan you can't afford or payback.

 

[ThisIsMe]

Student Loan Forgiveness Is an Idea Whose Time Has Gone

Student Loan Forgiveness Is an Idea Whose Time Has Gone

www.bloombergquint.com

OR

Is Student Loan Forgiveness Finally Coming? Here’s What We Know for Sure

Separating the facts from mere speculation and rumors about debt cancellation.

www.chron.com

Since people aren't making the payments now, I don't see how forgiveness would add to consumer demand. But it would increase the overall debt if the govt would just assume the "dollars." But the fed is trying to reduce consumer lending without killing corporate ability to raise private loans with issuing bonds. The Fed CAN raise the amount of funds banks hold and that takes money "out" of the economy.

so, and this is jmo, anyone taking on debt to buy a new boat or car or whatever that they don't REALLY need is absolutely NUTs given the economy and Ukraine. Seinna tells us we can't raise taxes even a few %pts on people making 500K a year. IF someone can show they're working 40 hours a week, kill the loans. Maybe they'll do the sensible thing and put anything extra in the bank, or godforbid get married to somebody and someday buy a house with 30 year mortgage and have a kid.

The problem with forgiving student loans is, the debt just doesn't go away. Money was borrowed and money was paid to a college. You can't just take it all back like it never happened, unless you are going to convince the schools to give that money back to the government, which is never going to happen, so, colleges got paid, students received an education, both gained something of value, and now the taxpayers are on the hook for it.

Why is it that certain people should be given a ...$20,000 to $50,000 gift, and then if they did things right, will eventually go on to earn a high salary. What is the reason that those select lucky individuals get this great handout, while others either paid their loans back, or never went to college, but still have to pay the taxes for people that did?

 

[BluesLegend]

The problem with forgiving student loans is, the debt just doesn't go away. Money was borrowed and money was paid to a college. You can't just take it all back like it never happened, unless you are going to convince the schools to give that money back to the government, which is never going to happen, so, colleges got paid, students received an education, both gained something of value, and now the taxpayers are on the hook for it.

Why is it that certain people should be given a ...$20,000 to $50,000 gift, and then if they did things right, will eventually go on to earn a high salary. What is the reason that those select lucky individuals get this great handout, while others either paid their loans back, or never went to college, but still have to pay the taxes for people that did?

Those who couldn't afford college and took a working class job to avoid the debt feel like chumps now.

 

[Stryder50]

Is government going to borrow 2 trillion to cover the cost? Well there you have it.

The Fed already has a $2+ Trillion Deficit, and a $30+ Trillion National Debt, and then $169+ trillion of unfunded liabilities so yeah, the OPs question is answered with yeah, it will increase inflation!

https://www.usdebtclock.org/

 

[Stryder50]

Supposedly one gets a college education and degree(s) to increase their employ ability and earnings potential. Consider that tuition and other expense as a sort of investment that should generate a higher return than if you never did college and got the degree(s).

Question I have is if one can't understand the concepts of debt and the obligation of paying back loans, are they really smart enough to be going to college in the first place ???

 

[JoeB131]

Supposedly one gets a college education and degree(s) to increase their employ ability and earnings potential. Consider that tuition and other expense as a sort of investment that should generate a higher return than if you never did college and got the degree(s).

Question I have is if one can't understand the concepts of debt and the obligation of paying back loans, are they really smart enough to be going to college in the first place ???

I think it's a tad more complicated than that.

When one takes out a mortgage, the bank will still hold the value of the home as collateral.
When you take out a car loan, the bank holds onto the pink slip for the car until it is paid off.

So what is the collateral for a college loan? It's essentially your ability to pay back the loan with the increased earning power the degree gives you, but it's not like the bank can make you work, or make an employer hire you. For the last 30 years, Wall Street has been clawing back at the gains made by the middle class, while college degrees have gotten more expensive, beyond the ability of most people to afford them.

What SHOULD have been scholarship programs instead became this commercial scheme where the banks got rich, and government got holding the bag. The way it should have been done is the government should have been the dispensers of scholarships and held the costs of tuition in check.

I went to UIC in the 1980's, where the total of fees and tuition were about $1500 a year. With where minimum wage was at that time, I could work 10 hours a week and pay tuition. (And I didn't have to even pay that thanks to the Army after my sophomore year)

Today, tuition at UIC is about $17,000 a year, and Min Wage has not kept up. You could work 40 hours a week and not have enough money for the tuition, much less books and labs.

Part of that reason is universities have run up the cost of tuition, but part of that is also state payments direct to state universities has declined.

 

[ThisIsMe]

I think it's a tad more complicated than that.

When one takes out a mortgage, the bank will still hold the value of the home as collateral.
When you take out a car loan, the bank holds onto the pink slip for the car until it is paid off.

So what is the collateral for a college loan? It's essentially your ability to pay back the loan with the increased earning power the degree gives you, but it's not like the bank can make you work, or make an employer hire you. For the last 30 years, Wall Street has been clawing back at the gains made by the middle class, while college degrees have gotten more expensive, beyond the ability of most people to afford them.

What SHOULD have been scholarship programs instead became this commercial scheme where the banks got rich, and government got holding the bag. The way it should have been done is the government should have been the dispensers of scholarships and held the costs of tuition in check.

I went to UIC in the 1980's, where the total of fees and tuition were about $1500 a year. With where minimum wage was at that time, I could work 10 hours a week and pay tuition. (And I didn't have to even pay that thanks to the Army after my sophomore year)

Today, tuition at UIC is about $17,000 a year, and Min Wage has not kept up. You could work 40 hours a week and not have enough money for the tuition, much less books and labs.

Part of that reason is universities have run up the cost of tuition, but part of that is also state payments direct to state universities has declined.

But isn't the reason the universities are getting so expensive is precisely because of government backed loans? The schools can charge whatever they want because they know the government will pay it. Once uncle sam cuts that check, they're good and from that point on it becomes a relation between the borrower and the government. There is no reason to be competitive with their tuition rates, and there is no reason for them to keep them low, when they know government, notorious for wasting money, will pretty much pay whatever the school wants, no questions asked.

Have government keep them in check? When has the government ever been fiscally responsible?

 

[JoeB131]

But isn't the reason the universities are getting so expensive is precisely because of government backed loans? The schools can charge whatever they want because they know the government will pay it. Once uncle sam cuts that check, they're good and from that point on it becomes a relation between the borrower and the government. There is no reason to be competitive with their tuition rates, and there is no reason for them to keep them low, when they know government, notorious for wasting money, will pretty much pay whatever the school wants, no questions asked.

Have government keep them in check? When has the government ever been fiscally responsible?

Not at all. You start out with the premise that is student loans vanished schools would suddenly become affordable. This is simply not the case.

What has made the cost of college increase is simple supply and demand. In 1985 when I went to college, only 18% of the population had bachelor degrees. Now that number is up to 42%.

30 years ago, when I first got into supply chain and procurement, you didn't need a bachelor's degree to do so. by the mid aughts, they were required, and today, they are looking for people majoring in that specifically.

The second reason why colleges are spiraling out of control is because of prestige things that attract students, such as star teaching staff, athletic programs, amenities, stadiums, etc. I mean, it's great if a college attracts a Nobel Prize winner to be on it's academic staff, but most student's won't get him as an instructor, they'll end up a TA or adjunct professor who is underpaid and overworked.

And to be fair, college is overrated. I feel I got far more out of my time in the Army than I did my time in college, but the main reason I joined the Army to start with was to pay for college. Go figure.

 

[Rigby5]

View attachment 637221

How about the government just get out of the business of issuing government student loans and let the universities take the risk?

If that education is such a great education the university can guarantee it or your money back..... or perhaps the university can sell insurance to the students.

*****CHUCKLE*****

That makes no sense.
If we allow the profit motive of universities to become our dictates, then the college educated would drop by about 90%. Very few can afford to pay the real costs of a college education. Colleges are heavily subsidized by the government because they improve our economy and quality of life.
They are a good investment even though they lose money.