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

[Batcat]

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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*****

The prices of a college education would fall dramatically once the government got out of the business of issuing student loans.

 

[Big Bend Texas]

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.

Only about 8% of people with student loans are in default.

Eliminating student debt would result in a flood of cash that will certainly drive up inflation.

Student Loan Debt 2022 Facts & Statistics | Nitro

Learn more about the average student loan debt in the United States and see how you can better manage your debt after graduation.

www.nitrocollege.com

 

[Rigby5]

There's a few huge piles of bull shite in play here!

First is that if one is smart enough to go to college and get a degree(s), they should be smart enough to know what they are getting into when undertaking loans to finance an education that supposedly will garner them higher person earnings potential after they graduate (a.k.a. funding of personal greed).

They should have the integrity and honesty and character to know the obligation they are committing to and due to repay.

They should know already that it may mean a few to several years before they are "paid off" and can honestly enjoy the life and lifestyle they have sought via the degree(s) they have "earned".

They should be bright enough to know that society owes them nothing that they haven't already earned.

They should be bright/smart enough to know that if they signed on to such an obligation and debt, they are honor bound to pay it off.

They should be bright/smart enough to know the timeline, interest rates, and payoff scale before having agreed to such.

They should be honest enough and have the integrity to not expect others to pay their debts and obligations.

And yes, USA Colleges/Universities should not be charging excessive costs on tuition and other education expenses that are beyond reasonable market costs/rates ~ (expect teachers and staff to take those pay cuts.).

Also, if taxpayers at large are expected to subsidize the cost of college for younger generations then the taxpayers are due a reasonable re-compensation for their subsidy.

Nothing to do with how "smart" a person is, but lack of experience instead.
Students likely never had a real job, or ever had to finance a household, so have no basis to know what they will be able to afford or not.
What they do know is that a college degree these days is essential, and that no one had a problem getting one if they wanted to, in the past.
They do not realize college expenses are over $5000 a year and they can easily owe over $100k after they graduate.(that is tuition plus living expenses)
Why shouldn't they expect others to pay?
That is the historic tradition in many states.
It makes no sense to saddle those who have no income, with that kind of debt.

 

[Rigby5]

The prices of a college education would fall dramatically once the government got out of the business of issuing student loans.

But so would the number of college students, so there is no point to it.
The US would fall to 3rd world status and all industry would offshore.

 

[Rigby5]

Only about 8% of people with student loans are in default.

Eliminating student debt would result in a flood of cash that will certainly drive up inflation.

Student Loan Debt 2022 Facts & Statistics | Nitro

Learn more about the average student loan debt in the United States and see how you can better manage your debt after graduation.

www.nitrocollege.com

Which would be a good thing.
Inflation makes loan repayment easier for all businesses.

 

[Big Bend Texas]

Which would be a good thing.
Inflation makes loan repayment easier for all businesses.

What the hell? Inflation makes it hard for businesses to even keep up.

I ordered about 20k worth of doors and windows for a house almost a year ago and the cost went up nearly 20% before they were delivered. The retailer I bought them from had to eat that loss.

It also means every paycheck you get is worth less.

Real wages will drop by about 8% this year due to inflation.

 

[Turtlesoup]

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.

Government involvement in college has pushed up the CHARGES that the college levies as they maximize their profits. It has also resulted in a rush of idiots getting degrees that are basically worthless.

 

[Turtlesoup]

Which would be a good thing.
Inflation makes loan repayment easier for all businesses.

And forces more old people and other poor people to eat dog food to survive.

 

[ThisIsMe]

Wrong.
It benefits YOU when more people are able to afford college.
It means more local productivity, greater GDP, less offshoring, less crime, more tax revenue,
Those who decide in selecting a degree like art history still are require to take a full breath and depth of college skills and will earn about twice as much as those who do not get a college degree.

The reason almost all countries offer low cost or free college education is that these government run the colleges and prevent colleges from being profit motivated. You don't use banks to finance tuition, but simply do not charge high tuition in the first place. Instead, you just pay teachers from tax money instead of tuition money.

Since the military is over 60% of our federal spending, obviously the military is why we do not have affordable education or health care. And don't try to find a site claiming the military is only 35% of federal spending.
If the site is including Social Security and interest on the national debt, then that is NOT a valid site.
Social security is self funding and the debt interest is actually old military spending.

Wrong.
It benefits YOU when more people are able to afford college.
It means more local productivity, greater GDP, less offshoring, less crime, more tax revenue,

Again, I disagree with the increased productivity. Someone who is a trash collector will be more productive to the community in general than someone who got a degree in philosophy. Maybe more tax revenue if they find a good paying job, sure.

Those who decide in selecting a degree like art history still are require to take a full breath and depth of college skills and will earn about twice as much as those who do not get a college

Yeah, but art history will not really have an impact on the community as a whole, and If that person earns about twice as much as someone who didn't go to college, then:

1) they can pay back their loans
2) that's great for them, but other than a little more in taxes, their having higher earnings doesn't benefit me, but it's great for them to be able to get free college so they can go on to make a great living.

Again, let's say we offer free college to everyone. Let's say we have a notable uptick in college graduates, who's going to do the menial jobs, you know, walmart, McDonald's etc...? There has to be someone who does those jobs. Its going to be those who, for whatever reason couldn't go to college. They get nothing while the others get a free education and a goof life, at the expense of the walmart worker.

The reason almost all countries offer low cost or free college education is that these government run the colleges and prevent colleges from being profit motivated

Sure, but we don't have that structure here in the states. We have many for profit colleges.

 

[Independentthinker]

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.

Without a doubt. And, I would be pretty pissed if I paid my student loans off while others got them written off.

 

[Moonglow]

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.

1979

 

[Ralph Norton]

And forces more old people and other poor people to eat dog food to survive.

I prefer Freshpet myself.

 

[Stryder50]

Wrong.
It benefits YOU when more people are able to afford college.
It means more local productivity, greater GDP, less offshoring, less crime, more tax revenue,
Those who decide in selecting a degree like art history still are require to take a full breath and depth of college skills and will earn about twice as much as those who do not get a college degree.

The reason almost all countries offer low cost or free college education is that these government run the colleges and prevent colleges from being profit motivated. You don't use banks to finance tuition, but simply do not charge high tuition in the first place. Instead, you just pay teachers from tax money instead of tuition money.

Since the military is over 60% of our federal spending, obviously the military is why we do not have affordable education or health care. And don't try to find a site claiming the military is only 35% of federal spending.
If the site is including Social Security and interest on the national debt, then that is NOT a valid site.
Social security is self funding and the debt interest is actually old military spending.

How about you provide a "valid" site and documentation on that "military is over 60% of our federal spending" claim. Or is more of what you pull out of your rectum?

This site linked is one that uses Federal Agency numbers, and includes things like "Social Security and interest on the national debt" because these are valid obligations that the the government and citizen have to pay. See the unfunded liabilities portion of the data (which includes Social Security which is NOT self-funding). And it will be noticed that currently Medicare/Medicaid and Social Security total over three times what we are spending on Defense(Military). It also has real numbers on the student loan debts.

https://www.usdebtclock.org/

BTW, there is a tab to see the amount of debt owed by other developed countries and many of those are a few times more than what we have in the USA, i.e. they are way in hock which future generations will have to deal with.