> not all students get the benefit, some already paid off their debts or a large part of it.
I'm one of the people who paid off a large portion of debt and probably don't need this assistance. However, this argument is so offensive. People were encouraged to take out debt for a number of reasons, and by a number of institutions, without first being educated about the implications of that. This argument states that we shouldn't help people because other people didn't have help. Following this logic, we shouldn't seek to help anyone ever, unless everyone else has also received the exact same help.
- slaves shouldn't be freed because other slaves weren't freed
- we shouldn't give food to the starving, because those not starving aren't getting free food
- we shouldn't care about others because they don't care about me
These arguments are all the greedy option in game theory, and all contribute to the worst outcomes across the board, except for those who can scam others in this system.
The right way to think about programs that help others is to consider cooperating - some people don't get the maximum possible, but they do get some! And when the game is played over and over, all parties get the maximum benefit possible.
In the case of student debt, paying it off and fixing the broken system, by allowing bankruptcy or some other fix, would benefit far more people than it would hurt; it would also benefit some people who paid their loans off completely: parents of children who can't pay off their loans now.
In the end the argument that some already paid off their debts is inherently a selfish argument in the style of "I don't want them to get help because I didn't get help." Society would be better if we didn't think in such greedy terms.
All that said - there are real concerns about debt repayment. The point about emboldening universities to ask for higher tuition highlights the underlying issue with the student loan system. Why bring up the most selfish possible argument when there are valid, useful arguments for your position?
> I'm one of the people who paid off a large portion of debt and probably don't need this assistance. However, this argument is so offensive.
Please spend my tax dollars on curing disease, fixing homelessness, free addiction treatment, better mental health care, improving our justice system, or even cold fusion. All of these have better outcomes than does paying off student debt.
> These arguments are all the greedy option
You left out the best argument against: there are much better things to spend money on.
I could get behind fixing Bush's biggest mistake - his bankruptcy change that moved the pendulum to lifetime debt. I'd love to see people be able to discharge student loans that are impossible to pay off or where the debtor was put in debt by a fraudulent or failed education institution.
I don't like it, but how would you prevent everyone from getting expensive schooling and then immediately declaring bankruptcy?
Just better redistribution and georgism/UBI type stuff but also keeping the need based stuff (medicaid, social security disability etc.) I think would be more fair and not punish people who paid off their debt or worked a job during school. Expanding free public education to K-16 and maybe ?more heavily taxing elite universities that get most of their value from the prestige of their own high ranking students who then have to pay more for it and other things like prestigious journals and even startup funds like YC, top law firms, etc. that work largely as prestige money redirectors where the value comes from those capturing the prestige but is redirected almost entireoy to just whoever kicked off the prestige flywheel early..
> I don't like it, but how would you prevent everyone from getting expensive schooling and then immediately declaring bankruptcy?
You don't! If the government is backing the loan, as is true in almost all cases, you eagerly take the write-off on the public purse in the knowledge that you've just gained an enthusiastic taxpayer who can open a new business or take a flyer on a new career, instead of a debt slave that is terrified to do anything but brownnose their way up the ladder at their dead-end callcenter job that will disappear the minute someone figures out it can be done in Bangladesh or by AI for cents on the dollar.
Sure, it would be better and more efficient to do this directly by nationalizing the state schools and offering free tuition or something, but we have to work with what we have.
Bankruptcies are not a cure all. They are a way to force creditors to work with debtors to either get the debt to where it can be paid back, or git rid of debts the debtor will ever be able to pay. The idea is to prevent usury or debt servitude. It also has the effect of introducing a risk to a loan where the lender can lose their money, and has to consider if it is a good idea to write the loan. Student loans are risky, so the government guarantees them, but even so the default rate is high. Perhaps our focus should be on figuring out why so many loans default and working on bringing expenses and outcomes to an alignment where people don't default.
In America so many banks are hungry to loan money. You can build up your credit and save. I recovered from bankruptcy before the ink was dry. I was driving a new car and living in a new house in short order. It is now long gone from my credit file. Don't ever talk someone out of bankruptcy if they qualify for it.
If you own a home you can exclude it from the bankruptcy. You can also include it and continue to pay the payments and the contract must be honored!
> how would you prevent everyone from getting expensive schooling and then immediately declaring bankruptcy
If the expensive schooling works, then the person should be able to get a nice, well paying job and pay off the loan over the next 20 years. Many of the differal programs (i.e. "putting the loan on hold") programs and policies would prevent this. It's when the clock runs out, and the student can't get the high-paying job that we have issues...
Isn't most debt incurred by graduate students, especially those in med or law schools? Surely 4 years of higher education should be enough for someone to figure out basic maths?
Maybe, maybe not? This is hard to find via search, possibly due to graduate being inside the search term undergraduate. :)
This shows the average total owed by graduate students is much higher than undergraduates, about 3x.
https://www.usatoday.com/money/blueprint/student-loans/avera...
So just spitballing here, if there are more than 3x undergraduates than graduate students, and the same number have loans, the undergraduate debt is higher overall.
The long rise of for profit undergraduate institutions until quite recently says it was extremely profitable to get students into debt for questionable education value, it's almost like payday loan shops, just preying on different segment of population.
I don't think traditional public or private four year universities are blameless, either, raising tuition to match this endlessly rising loans guaranteed by Federal government with spiraling administrative system costs.
Even though the cost is high I thought in the USA the number of med school students is restricted to a very small number.
>People were encouraged to take out debt for a number of reasons, and by a number of institutions, without first being educated about the implications of that
18 year olds don't understand what a loan is? Zero accountability?
In the United States? For huge swaths of the population that answer is obviously no. Financial education and literacy in this country is a complete fucking joke. Very few people expected that they would be on a payment schedule that amounted to $200/mo for 30 years, and for a significant portion of them, there was really strong messaging implying that getting a college education was the only pathway to financial success, such that student loans were worth it. Two generations and counting have been massively duped.
Basically all college-bound 18-year olds understand what debt is — you’re infantilizing them to a ridiculous degree if you think otherwise. A lot of them choose to proceed with college due to career optimism and following the herd, not because “debt” is some magical concept that they don’t understand.
Basically all college-bound 18-year olds understand what debt is
not to sound snarky but seldom do I read here something more wrong... if they did they would NEVER take on the kind of debt they are taking on in droves to get that paper. "debt" is one thing, you probably understand "debt" when you are a kid... understanding loans however - is an entirely different thing from general concept of "debt"
I suppose we’ll have to agree to disagree. I know lots of liberal arts majors who still have a lot of student loan debt in their late 20s and 30s. They knew what they were doing when they enrolled in college and chose their major, it wasn’t like cost of tuition or what an “interest rate” is was somehow obscured from them or too difficult for them to comprehend. In some cases they regret the choices they made earlier but that’s a different matter, those choices were not made in ignorance of the basic situation they were entering into.
We definitely agree to disagree… I am trying to understand your point of view but failing - if they understood the loan and still took on it does that mean that they are just being irrational? or stupid (I don’t mean to sound mean here but lacking a more PC word here…)?
They absolutely understood the terms of the loan. I think they do it anyway because: (1) everyone else is doing it and they don’t have a good alternative (2) career optimism. If you end up becoming a lawyer/consultant/accountant or otherwise have a good corporate job, in the medium-term your student loan debt doesn’t really have a significant impact on your life.
It’s really only a problem if you (1) choose a private college and don’t stay in-state, (2) get a degree which doesn’t have a lot of practical value, and (3) then want to pursue a low-paying field or get a not-useful graduate degree. For example, a friend of mine did her undergrad in art history, master’s in museum studies, and works for a non-profit. She’s not rich but she’s able to survive reasonably comfortably. She’s not dumb or financially illiterate, and she knew what she was getting in for.
I'm just gonna mention that during the 2010s, Donald Trump had $287 million in loans forgiven after refusing to pay and suing the lender for "predatory lending practices."[1]
But yeah, let's make sure we squeeze every drop out of those college students, they should have understood their loan terms.
Consider that his position might be more profound than you considered it to be.
Mine is. It's about incentives.
Now you can take it from there, and at least in my interpretation the rest of your rebuttal falls apart.
There is absolutely no equivalency to slavery. That is simply dishonest. Slaves didn't choose to be slaves.
Do students who take on debt have no agency whatsoever to you?
Did the people who paid such debts had no agency when paying?
If you don't like the equivalence to slavery, pick a different example, there are three I posted and more you can probably think of on your own.
We know that the idea of a rational agent in economics is a myth, and as you mentioned, it is about incentives, as well as motives.
Students who take on debt that limits them in later life don't have all the information they need at the time they make the decision. Saying the information is available is not reasonable. These students are told they _most_ go to college to make a living.
They are not told they need to get an engineering, medical, or finance degree to make going to college worth it, economically.
They are shown all the loans they can get without an equivalent amount of effort put into educating them about the consequences those loans represent. For example, how much the loans will cost in the long run, along with estimated pay for various fields of study.
Furthermore, the loans are given for any degree program without restriction.
All the comments I made about game theory still stand, and we don't need to get into the myriad problems with our education and student loan systems. I agree they aren't perfect; I just think the argument 'I didn't get my loans paid off neither should you' is an extremely selfish one. Just because someone suffers doesn't mean everyone should. Also - in my experience people who are ready to make that selfish argument are very offended when it gets flipped on them. So they can understand intuitively the issue with the selfish position.
> They are not told they need to get an engineering, medical, or finance degree to make going to college worth it, economically.
This is a very well known fact. When I was in high school in the 2000s, it was a well known joke about how the arts / english majors won't land you a job. And even if you never heard about it, the data for average salary for graduates in the college, its dropout rates, and salary by majors is highly publicized. This isn't advanced research to do and in the age of internet, someone considering college should be able to do. I think the problem is no one believes they are the average case and instead are the exception who'll make it work.
I'm one of the people who paid off a large portion of debt and probably don't need this assistance. However, this argument is so offensive. People were encouraged to take out debt for a number of reasons, and by a number of institutions, without first being educated about the implications of that. This argument states that we shouldn't help people because other people didn't have help. Following this logic, we shouldn't seek to help anyone ever, unless everyone else has also received the exact same help.
- slaves shouldn't be freed because other slaves weren't freed - we shouldn't give food to the starving, because those not starving aren't getting free food - we shouldn't care about others because they don't care about me
These arguments are all the greedy option in game theory, and all contribute to the worst outcomes across the board, except for those who can scam others in this system.
The right way to think about programs that help others is to consider cooperating - some people don't get the maximum possible, but they do get some! And when the game is played over and over, all parties get the maximum benefit possible.
In the case of student debt, paying it off and fixing the broken system, by allowing bankruptcy or some other fix, would benefit far more people than it would hurt; it would also benefit some people who paid their loans off completely: parents of children who can't pay off their loans now.
In the end the argument that some already paid off their debts is inherently a selfish argument in the style of "I don't want them to get help because I didn't get help." Society would be better if we didn't think in such greedy terms.
All that said - there are real concerns about debt repayment. The point about emboldening universities to ask for higher tuition highlights the underlying issue with the student loan system. Why bring up the most selfish possible argument when there are valid, useful arguments for your position?