Elizabeth Warren plans to eliminate 640 billion worth of student loan debt

Mar 2012
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New Hampshire
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Interesting idea, thoughts?

Sen. Elizabeth Warren rolled out yet another ambitious policy proposal Monday morning as she called for canceling approximately $640 billion in outstanding student loan debt.

“It’s a problem for all of us,” she said of the massive amount of debt carried by students, which has reached more than $1.5 trillion and affects more than 40 million Americans. “It’s reducing home ownership rates. It’s leading fewer people to start businesses. It’s forcing students to drop out of school before getting a degree.”

The plan would eliminate up to $50,000 in student loan debt for each person with less than $100,000 in household income. The $50,000 in relief would gradually diminish for people with household incomes between $100,000 and $250,000 ($1 less relief for every $3 earned). People with household incomes over $250,000 would not receive debt cancellation.

Warren couples the student debt forgiveness with a proposal to eliminate tuition and fees at all two-year and four-year public colleges. She presents the proposals as working in tandem: First, eliminate much of the student loan debt and then restructure the system to ensure that such debt doesn’t accumulate again.

“Once we’ve cleared out the debt that’s holding down an entire generation of Americans, we must ensure that we never have another student debt crisis again,” she wrote.

Warren proposes $640 billion student debt cancellation
 
Likes: pragmatic
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Jan 2012
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If she wanted to help she could just make them dischargable like every other bad debt. Then the government would have to act like any other business when making a loan. I suspect we would have plenty of loans for engineers and fewer for LatinX Social Justice Poetry.

However as it is right now the only debt you cannot discharge in a bankruptcy is government student loan debt. As usual it is government that is above the rules and government that has the "solution" to creating an entire class of indentured servants that are beholden to said government in the guise of good intentions.
 

Singularity

Former Staff
Oct 2009
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Student loan debt shouldn't just be forgiven across the board. That's not fair to those who have paid theirs off, sometimes sacrificing a lot to do so. I say this as someone who still owes student debt and will probably be making standard payments for another few years.

However, the root cause of student debt — high tuition and fees for "public" institutions, largely in place to pay for unnecessary administrators, athletics programs and buildings — definitely needs to be tackled, and it is a rank obscenity that student debt can't be discharged, even in death** (if there is a cosigner, as is almost always the case).

Warren is still right to bring this up. Congress has been ignoring the issue for years, because the student loan servicers pay them to ignore it. If it's not discussed, there will be no pressure to adjust the situation, even if Warren's ideas are beyond what's prudent or necessary. The Overton Window matters.

**Yes, there have been cases where a student gets so badly in debt that both they and their family become destitute, the student commits suicide, and the family still must pay.
 
Last edited:
Mar 2012
57,873
39,432
New Hampshire
#8
Student loan debt shouldn't just be forgiven across the board. That's not fair to those who have paid theirs off, sometimes sacrificing a lot to do so. I say this as someone who still owes student debt and will probably be making standard payments for another few years.

However, the root cause of student debt — high tuition and fees for "public" institutions, largely in place to pay for unnecessary administrators, athletics programs and buildings — definitely needs to be tackled, and it is a rank obscenity that student debt can't be discharged, even in death (if there is a cosigner, as is almost always the case).

Warren is still right to bring this up. Congress has been ignoring the issue for years, because the student loan servicers pay them to ignore it. If it's not discussed, there will be pressure to adjust the situation, even if Warren's ideas are beyond what's prudent or necessary. The Overton Window matters.
Agree. I do like the idea of lowering costs of colleges however I have been reading that a lot of expense coming from state and public universities is their pension plans. The public college my oldest attended said in a recent publication that over 50% of their costs go to retired professors and admin and that they are contractually obligated. They actually expect it to get worse as some retire earlier and live longer. I do think this is going to be a huge cost at many places.
 

Singularity

Former Staff
Oct 2009
33,036
27,378
Kansas
#9
Agree. I do like the idea of lowering costs of colleges however I have been reading that a lot of expense coming from state and public universities is their pension plans. The public college my oldest attended said in a recent publication that over 50% of their costs go to retired professors and admin and that they are contractually obligated. They actually expect it to get worse as some retire earlier and live longer. I do think this is going to be a huge cost at many places.
In cases where admin jobs aren't pure patronage schemes — which is distressingly common from all outward appearances — a large part of what new "vice presidents" et al. do is communications and donor service. Universities see it as an investment that helps them pick wealthy alumni pockets as public funding declines.

It has come to the point where it's a bad investment, at least in the long term; more admins is more salary and more long term pension commitments.
 
Likes: Blueneck
Mar 2012
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New Hampshire
#10
In cases where admin jobs aren't pure patronage schemes — which is distressingly common from all outward appearances — a large part of what new "vice presidents" et al. do is communications and donor service. Universities see it as an investment that helps them pick wealthy alumni pockets as public funding declines.

It has come to the point where it's a bad investment, at least in the long term; more admins is more salary and more long term pension commitments.
I also know at least with the universities I am familiar with, it isnt uncommon for admin and professors to work until 60 or so, get a state pension and then go to work in private enterprise and get another pension. They make a ton of money and like you say, end up in their 60s and 70s going around and getting donations from alumni. It seems like a lot of money that gets passed down to students.
 

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