Economic Stimulus: Student Loan Forgiveness?

[NetSkyBlue]

No, I don't think student loans should be forgiven. I worked my butt off in high school, taking college classes that were paid for, then getting scholarships, and then took full course loads every semester and summer and winter classes in order to get my 4 year degree in 2 years. I finished with about 8k in debt. I hope to pay it off entirely by next February, 8 years later.

[Scanner]

Okay. . .I think we all agree on the moral offensiveness on what I suggested.

Let me frame the question another way:

A. Pass a fiscal stimulus of 1 trillion in government spending and tax breaks to businesses and families.

or

B. Pass a bill of 1 million in student loan forgiveness

Which would you vote for (if presented with this devil's choice) and why?

No vetoing. Imagine you have a mob outside your office demanding intervention (imagine your Obama, lol).

[disneysteve]

Let me frame the question another way:

A. Pass a fiscal stimulus of 1 trillion in government spending and tax breaks to businesses and families.

or

B. Pass a bill of 1 million in student loan forgiveness

Which would you vote for (if presented with this devil's choice) and why?

I'd vote for A without question. Keep in mind that despite constantly hearing about the unemployment rate of nearly 10%, the rate for those with college degrees is only a bit over 4%. College graduates aren't the ones hurting so I don't see the benefit in giving them the stimulus money and I'd certainly oppose, as I already stated, forgiving student loans. They borrowed the money. They should work to repay the money.

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School Debt A Long-Term Burden For Many Graduates : NPR

Apparently, this topic is going to continue to get attention.

[Scanner]

Steve,

I don't know. . .I kinda feel like businesses and families "had theirs" so to speak. If I was in a "stimulating" mood I may be inclined to seriously look at this.

Put money into the pockets of people who have the potential for discretionary income and would spend to create demand and get teh economy going.

All an academic discussion.

The problem is we probably shouldn't be subsidizing education to the degree we do already.

[Scanner]

The article I posted featured a law student in $160,000 in debt. I don't know what to even say to that. . .so many dysfunctions in America, I don't know where to start:

A. Why would taxpayors want more lawyers to exist? Does our country really need more lawyers? In China, the ratio is 1:10,000. In the US, it's 1:300. The question in my head is. . .why would we even loan money to ANYONE to go to law school? Let alone $160,000 of taxpayor money?
B. This student, who assumedly is literate, would have to understand the reality of the situation. There have been many articles of lawyers unable to find jobs within firms.
C. Law schools should be held accountable politically but they aren't. . .so they are going to take your money gladly.

We used to build airplanes, cars, and computers as a nation.

Now, we just manufacture laws, I guess.

There is going to have to be a grassroots effort at reforming higher education and student loans.

[disneysteve]

Put money into the pockets of people who have the potential for discretionary income and would spend to create demand and get teh economy going.

Here's the problem. What are well-educated folks doing with surplus money these days? By and large, they are shoring up their finances, beefing up the emergency fund, adding to their retirement accounts, etc. They are less likely to be out spending windfalls. If you want to stimulate spending, you need to give the money to people who are likely to spend it. That would be lower income folks, people who are unemployed in higher numbers, businesses that are delaying expansion or buying new equipment or upgrading things. Our office needs two new computers but we've been putting it off hoping business would pick up. If we got a stimulus check for a couple thousand, we could use it to get those computers.

The article I posted featured a law student in $160,000 in debt. I don't know what to even say to that

I know a young couple who are both recent med school grads. They have combined student loan debt of over $400,000! Insane doesn't begin to describe that situation. They will be in debt for the rest of their lives. It took me 12 years to repay $100,000. Granted I'm an FP so I'm at the bottom of the payscale for doctors so I hope they both end up in high paying specialties.

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DS,

Yeah, but I can kind of "get" the $400,000 for doctors. It's pretty well documented that we need doctors and nurses, although I think it was a stupid financial decision on their part.

Do we need certain specialities? Not sure. I know we don't really need more chiropractors, like myself. If I see another cancer center go up that looks like the Taj Mahal, I may barf. (cancer treatment is the new "cash cow" in medicine I am convinced) I am quite aware there is a saying in med school - the ROAD to success (radiology, oncology, anesthesiology, dermatology).

We all know the problem in healthcare. It's backwards. Supply drives demand. You manufacture more radiologists and then more MRI's are to follow.

Anyway. . .I digress. . .just sayin'. . .okay, I kind of get the idea of subsidizing medical education.

But who in their right mind would say we need more lawyers in this country? Can't at least the taxpayor pick and choose what we are going to loan money for? I mean, should someone who wants to major in "History of the Transgendered Disabled" get the same money as someone who wants to be a nurse?

[GREENBACK]

I know a young couple who are both recent med school grads. They have combined student loan debt of over $400,000! Insane doesn't begin to describe that situation.

That absolutely blows my mind. I guess if you become a high end surgeon or something that can be justified but that is still a chunk of dough.

[maat55]

I'd vote for A without question. Keep in mind that despite constantly hearing about the unemployment rate of nearly 10%, the rate for those with college degrees is only a bit over 4%. College graduates aren't the ones hurting so I don't see the benefit in giving them the stimulus money and I'd certainly oppose, as I already stated, forgiving student loans. They borrowed the money. They should work to repay the money.

You are advocating that the federal government spend a trillion dollars it does not have? Are you seriously advocating that the government take more money from the private sector and spend it paying off campaign contributions?

[asmom]

Well, that's what I kind of wanted to avoid - the moral dimensions of this proposal,because for some reason, it strikes people as more morally acceptable to give out a tax break to a solar panel company supposedly making jobs (even though there is usually no accountablity on that), then it does to a bunch of new grads saddled with debt.

Morality aside, I wonder what would have the biggest impact economically.

Well as you've learned, it's unavoidable.

It's hard to believe but part of the reason our country remains mired in political and financial gridlock is due to emotion. Everyone's angry and feels they've been screwed while someone else is getting something for nothing - usually at the expense of the angry person. Therefore no one is willing to make a concession for the greater good if they think someone might not have it as bad as they did. So here we are.

In terms of your proposal, I am not sure if it would make a significant positive difference. The issue is jobs creation. Loan or no loan, you are not going to spend money if you don't have a job. And if your degree is in women's history and leaf science, you're not going to have a job to spend extra money on anyway.

Besides,if we are going to reform education we should return to an emphasis on vocational education and trade skills. Nowadays, it seems like kids are steered to college or nothing. There's no in between. That's a significant factor in the loss of the middle class that doesn't get enough attention.

Perhaps instead of forgiving student loan debt outright there could be an exchange: we'll forgive the loan if you apprentice yourself to XYZ trade and spend XYZ years working for the feds/state/local government applying those skills.

[disneysteve]

You are advocating that the federal government spend a trillion dollars it does not have?

Absolutely not. I was just answering the hypothetical question: you must choose A or B, which would you choose? Personally, I'd choose neither but that wasn't an option.