At long last, the Biden administration has taken a modest step on student debt relief. Biden announced yesterday a plan to forgive up to $10K in student debt (assuming you make less than $125K) and up to $20K if you received a Pell grant. It’s a start, right? Naturally, Republicans framed it as yet another government giveaway to the undeserving, which makes me think more highly of Biden, at least for a moment.
Why am I disappointed in Biden’s action? Let’s take a look at his own website and its promises on student debt relief:
So, Biden had promised “immediate cancellation” of a minimum of $10K, with no preconditions and no need to jump through paperwork hoops. That “immediate cancellation” still hasn’t come (you must still apply and wait for “relief”), and “immediate” took 18+ months, timed so as to win some positive feeling in this fall’s election cycle. So be it. Something is better than nothing, right?
But look at Biden’s second big promise. He was going to forgive all tuition-related student debt for many students, especially minority students. I’ll repeat that: all student debt. His latest announcement doesn’t come close to his own stated goal.
What people tell me is this: Too bad. The Republicans wouldn’t give students any relief whatsoever, so the Democrats deserve your vote because they gave $10K in relief. Be happy with that, shut up, and vote blue no matter who.
Color me unconvinced. Student debt in America sits at $1.7 to $1.9 trillion. Biden just canceled about $200 billion of that debt, or just over 10% of it. As I said, it’s a start, but it represents a half-measure at best when you compare it to Biden’s own stated promises and goals.
In the past, Senator Joe Biden helped to secure legislation that prevented student debt from being discharged during personal bankruptcies. So even if you go bankrupt (and the leading cause of bankruptcy in America is medical bills), you still owe all the money on your student debt. As far as I know, that hasn’t changed. Thanks for that too, Joe.
For the cost of the F-35 jet fighter over its lifetime, Joe Biden could cancel all student debt in America. Instead, he chose to nibble at the edges, canceling about 10% of it, while fully funding the F-35, new nuclear weapons, and announcing yet more military “aid” for Ukraine.
Is this really the best the Democrats can do on student debt relief? Is this the best our country can do? Say it ain’t so, Joe.
83 thoughts on “Biden Tackles Student Debt — and Misses”
That $10,000, in some instances, is merely going to wipe out accrued interest for some borrowers. College has been far too costly for many, just considering the tuition fees, etc., of Penn College as one example.
As far as campaign promises, how often do we ever see politicians keep their word? Yes, it’s a start, and likely also the end of the “generosity” as well.
Please, sir, may I have some more … debt relief?
Dammit, no. Are there no prisons, no workhouses?
Which is not to say anyone is comparing children who had little to eat with those who have PhDs in Diversity Studies and spent 12 years in colleges and universities.
I’m seeing estimates of the cost of this at $400 to $700 billion. To be paid for by inflation by us and by higher taxes on our children and grandchildren. And whatever the additional 87,000 IRS agents can extract from the citizenry, mostly I’ll bet from the middle class. And all to pay for people who got advanced degrees in fields unrelated to anything in the real world.
LikeLiked by 1 person
I paid for my advanced degrees the old fashioned way: voluntary servitude to the U.S. Air Force. 🙂
Aim high, I say!
Good for you. I also paid for mine out of my paycheck.
The New Zealand gubmint paid 100% for mine!
Of course you had to take the University Entrance Exam.
Of which, the pass rate was only 8%
ALL GONE NOW – the conservatives squashed that in the late 70’s.
European and Commonwealth countries have more of a meritocracy, replacing the hereditary nobility of the past. The relatively few people passing the tests are admitted to schools and after their degrees are expected to take their places as the governors of the society. We in the US recoil at such unequal notions, which leaves the Biden administration free to reward students more likely to support their party, a philosophy more often found in what are called underdeveloped countries. People who point to such practices as likely to lead to the downfall of our pluralist society are dismissed as cranks.
LikeLiked by 1 person
so, wja, your ‘advanced degrees’ sourced from that slaughtering, bombing murder-machine the US military hubristically applauds as ‘the greatest fighting force in the history of….” [you select your own euphemistic equivoque, sir william]. the irony must not escape you as a peace-promoter and activist.
alex’s comments evoke soupçons of palpable profundity for me, one that most spoiled americans prefer to subsume below their benighted consciences. no uber-educated american can be exculpated from his/her role, whether ancillary or direct, in these exterminations by bombs, guns, sanctions, starvation, nuclear weaponry, or other derivatives of deprivation. simply agreeing to pay taxes to these tartuffes traps us in malfeasing culpability.
Yes, Jeanie, there’s some irony there.
The military, generally speaking, is in favor of education. All officers have at least a bachelor’s degree, and you typically need some kind of master’s degree to reach major or lieutenant colonel.
What might surprise many people is the enlisted ranks, who usually also have associate and bachelor degrees, and sometimes master’s.
But the education is often utilitarian. I got “educated” so I could teach at the Air Force Academy, and my degrees were humanistic. Indeed, my specialty was the history of science and religion.
So I was very much atypical and educated at research universities (Johns Hopkins and Oxford) that stressed critical thinking and independent research.
Even so, I really didn’t become “outspoken” until after I retired. In short, I was no profile of courage. And it took me some time to find my voice.
The other winners would be colleges and universities themselves who will now be free to raise tuition by $10-20,000, knowing that the government will just step in to pay for the excess. They will be free to hire hundreds more assistant deans of Gender Studies etc., consisting of people who got such degrees from the universities and were unable to find matching jobs in the private sector. Of course the faculties and administrations of such colleges typically vote Democrat so we can look at it as just Biden taking care of his base. The Democrat base used to include ordinary blue-collar working people but those times are well past. Now they just get screwed by the likes of Biden.
LikeLiked by 1 person
Come on ALEX! This will help kids get Engineering Degrees. Architecture Degrees. Lawyers. Doctors. Nurses. etc etc.
Not every kid gets a degree in Gender Studies for goodness sake. I find your take on this very cynical. Why not look on the bright side – as one step to all who qualify for tertiary education getting assistance?
People with technical and medical degrees are more likely to make over $125K, which leaves them outside Biden’s “generosity”. People within the $125K limit are probably more likely to have majored in some liberal arts field, dominated by Biden supporters. This is pure graft and corruption – vote for us and we will pay back your college loans. Biden of course justifies his program because college costs are very high, having increased much faster than inflation rates. This program gives license to colleges to raise rates even faster, which I suppose will justify even more “relief”. A downward spiral fueling inflation, inequality, and debt.
LikeLiked by 1 person
First of all, how do you know what the voting record of the tertiary education population is?
And secondly, do you see no value to society in a tertiary education in liberal arts?
You don’t want your kid to receive lessons to play piano in your local orchestra? Or to teach history?
You see less value in history, or political science or all other liberal arts fields?
And properly designed and administered tertiary education subsistence programs do not to have to fuel inflation, inequality and debt. Arguably they can do the opposite. Google it.
And I agree with you that Biden’s program could maybe have the negative effects you proffer.
But its a start – don’t let the perfect be the enemy of the good eh?
Biden’s “plan” does absolutely nothing to slow down inflation in college costs. Instead it just stokes the fire. He’s got the same “to the victors belong the spoils” attitude that ruins other countries and may ruin mine.
LikeLiked by 1 person
As I understand it the bulk of student loans are held by people with degrees above the bachelor level. As for my cynicism, consider the makeup of my government. As far as I’m concerned spending for things like the war on Russia and this student loan stuff are two sides of the same coin – spend like there’s no tomorrow. It might be interesting to find out (via the news media) which degrees would be funded by this money but I don’t expect them to put any effort into it. The results might cause too many people to become angry at what they rightly see as a waste of their money.
LikeLiked by 1 person
Well ALEX your country is going to be looking at toward a pretty sick tomorrow with more and more of its young citizens not being able to receive a tertiary degree. Unlike you apparently, I see a high level of tertiary education in all fields as an absolute necessity for the country to compete in the World. And whose to say whether an Engineer is more valuable to the country than a history professor? Are you volunteering for that job? Maybe you are!
I was educated as an engineer and as a historian. Think of how valuable I am! 🙂
An Engineer who knows that historically bridges have collapsed, buildings fallen down down and aeroplanes crashed – is much more valuable that one who has never studied history. At least I would think so.
I guess ALEX is not going to be seen with this bumper sticker on his car – “Lets have a Bake Sale to fund the next aircraft carrier, and provide University Education free.”
How about this, Dennis. We send all the students who majored in some type of Grievance Studies to New Zealand and you keep them there. We’ll both be happier.
LikeLiked by 1 person
The sickest part of all this is that the US is the richest nation on Earth.
They can afford to subsidize tertiary education to a higher extent than any other country in the world.
Its all a matter of priorities.
To those running the show at the moment, tertiary education takes a lower priority than bomb making.
We have $30 trillion in public debt versus a $24 trillion annual GDP. That’s not particularly healthy. And given our levels of public expenditures our debt is forecast to rise by a trillion a year. By comparison New Zealand has a public debt that’s roughly half your annual GDP. It’s just nonsense to think we could or should pay for unlimited tertiary education for those who want it.
LikeLiked by 1 person
Alex, economics is way above my pay grade. But I keep reading all these articles on the internet by American economic gurus who proffer that the US’s public debt in the trillions is meaningless – or words to that effect. Something about the US’s ability to control and print its own currency? Here is just the first couple of articles a Google search comes up with:
And then I hear that, say Italy, or New Zealand is not in the same boat! And needs to carefully control its debt to GDP ratio. I don’t understand.
And why don’t I hear an outcry, or even a whimper, about the US’s huge public debt when giving $50-zillion to Ukraine with 15-minutes debate, or increasing the gargantuan Military Budget?
BTW I have not heard any proposal that mandates that the US should pay for “unlimited tertiary education for those who want it”.
“Higher education on demand.” Sort of like “abortion on demand.” These misleading ideas are tossed out there to anger and divide people.
LikeLiked by 1 person
Yes Bill, Americans hear the same wailing and gnashing of teeth when MEDIARE4ALL is proposed to give all Americans healthcare like the rest of the developed world —” but the public debt! Oh my God, how we going to pay for it?”
“Ummmh. It will cost less! Americans will actually save money”…”but how are we going to pay for THAT?” LOL
I cannot resist this Bill, sorry:
Republicans: “all those people who lost their manufacturing jobs to overseas outsourcing of jobs will just become computer programmers!”
Me: “but you don’t want to subsidize their higher education to perform that transition.
Republicans: “Hell no! Whose going to pay for that?”
The reason You don’t hear outcries about additions to America’s National Debt, Dennis, is because ~ by and large ~ very few people in this country even know What it is; let alone What is means and Why it is important,
And even if they do know about it, they have more immediate things with which to be concerned about; and generally either don’t understand or don’t care how government spending without taxation leads to Debt.
On the other hand, those who do know about it and care about it ~ the folks in Swampland and their owners and operators ~ also know how to use it to their advantage. Or at least they have up til now.
Whether they will be able to continue to use that Debt to their advantage remains to be seen as it continues to grow; and interest costs soar.
Along with inflation, food, fuel, and energy shortages, weather- and climate- related disasters, a resurging pandemic, possible World War III in Europe and Asia, and an election scheduled for November 8.
A country that prints it own currency can keep putting off debt reckoning. Until the point where their currency is no longer accepted by the outside world. At which point the country’s economy collapses, and some organization like the IMF comes along and tells it that the people have to live in poverty to pay off the debt. Up to now, we have been the big funders of the IMF, absorbing all those bad loans from countries whose economies have collapsed. As long as we can keep juggling those balls we won’t get trapped. Of course it’s convenient to the big spenders to believe that big spending doesn’t matter, that they can keep doing it indefinitely.
LikeLiked by 1 person
REAL ECONOMICS, Dennis, isn’t above anybody’s paygrade.
Here are some examples of Real Economics that take those views expressed by some American economic gurus to task:
DEBT DOESN’T MATTER, BECAUSE “WE OWE IT TO OURSELVES”? WHY KRUGMAN AND KEYNES ARE WRONG ABOUT THIS
It is an undeniable fact that debt, whether private or public, must, eventually, be repaid.
YES, THE NATIONAL DEBT MATTERS
Many Democrats and Republicans act like spending isn’t an issue. Here’s why they’re wrong.
TOP 10 REASONS WHY THE NATIONAL DEBT MATTERS
At $30 trillion and rising, the national debt threatens America’s economic future. Here are the top ten reasons why the national debt matters.
Don’t worry: When Trump is president again, he’ll declare a national bankruptcy (think of America as a failing casino) and we’ll get a bailout and a redo.
LikeLiked by 1 person
Heh. That assumes that the bottom doesn’t fall out before 2024.
Economist and author Michael Hudson, author of ‘…and Forgive Them Their Debts: Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year’, shares with journalist Chris Hedges how ancient cultures forgave debt cyclically to prevent debt peonage and the rise of an oligarch elite – Dec. 2018
Hudson has more economic knowledge in his little finger than all these charlatans Jeff. Trumps idea of a cyclical debt forgiveness is based on the Christian Bible. Declaring a national bankruptcy is a very valid economic concept…..Let Hudson explain it to you!
All which “charlatans,” Dennis? The ones You cited, or the ones i did?
And given Your own acknowledgement that “economics is above Your pay grade,” on what basis do You declare Hudson to be so smart and so wise?
I know Einstein was smart and wise Jeff – and Nuclear Physics is above my pay grade.
Just like I know Kelly Johnson was a great airplane designer. And I know next to noting about designing supersonic airplanes or aeronautical systems engineering.
How do you judge the wisdom of your favourite economists?
Einstein and Johnson produced something real in and for the Real World that the entire world could and can use because it worked and works. That’s how and why You know about what they did, and that they had to be intelligent, educated, and creative in order to be able to do that.
What has Hudson produced in the Real World that the entire world can use besides a book extolling the virtues of something that happened thousands of years ago on a completely different planet with completely different systems of civilization, culture, society, economics, and politics?
And i judge the wisdom of the economists whose ideas i subscribe to based on the accuracy of the predictions they have made over the years as regards how an Economy works ~ and doesn’t work ~ when the predominate force in that society is the Special Interests that own and operate the politicians and bureaucrats running the government.
If You are interested, they include Bastiat, von Mises, Hayek, Rothbard, and Hazlitt, with Hazlitt’s work ECONOMICS IN ONE LESSON serving as the foundational start point for digging in to all the others. EI1L is available in PDF at https://www.hacer.org/pdf/Hazlitt00.pdf
Actually, like Hudson, I think Einstein developed mathematical models for predicting how the things he was studying behaved. What Einstein did for atomic particles. Hudson and all other theoretical economists did for economic behavior.
And I’m sure one could pick another list of theoretical Economists as the foundational starting point for digging in to all the others. Milton Freidman, John Maynard Keynes, Michael Hudson and Paul Krugman would serve just as well. All economists have been varyingly successful with their predictions. Its interesting to me that Hudson was one of the few who predicted the 2008 crash.
i don’t know about Hudson, but Friedman’s foundational starting point for digging into all other economic theories had and still has very little ~ if anything whatsoever ~ to do with the views held and theories and actions espoused by Keynes back then, and especially, or by Krugman today.
That first link i provided as alternatives to the people You cited spells out quite clearly what Friedman would probably have to say about Deficits, the Debt, and Keynes’ and Krugman’s take on it if asked:
DEBT DOESN’T MATTER, BECAUSE “WE OWE IT TO OURSELVES”? WHY KRUGMAN AND KEYNES ARE WRONG ABOUT THIS It is an undeniable fact that debt, whether private or public, must, eventually, be repaid. https://fee.org/articles/debt-doesn’t-matter-because-we-owe-it-to-ourselves-why-krugman-and-keynes-are-wrong-about-this/
In learning more about all this, i came across this Washington Post Opinion piece on a Debt Elimination that You might be interested in by Hudson back in March, 2020, just as the COVID Event was kicking in. It did nothing to change my opinion on the matter, but may reinforce and solidify Yours: https://www.washingtonpost.com/opinions/2020/03/21/debt-jubilee-is-only-way-avoid-depression/
And as far as Hudson’s predicting the 2008 Bubble and Crash, i found this to be quite interesting: https://intheblack.cpaaustralia.com.au/economy/6-economists-who-predicted-the-global-financial-crisis-and-why-we-should-listen-to-them-from-now-on . You may note that there is no mention of Hudson.
Ahhh. So THAT’S what Trump did in all his bankruptcies: “cyclical debt forgiveness based on the Christian Bible,” eh? GMAFB.
And declaring a national bankruptcy may be “a very valid economic concept” in the world of economic theorists and academicians, and people who know nothing about economics in the Real World.
But tell that to people in the nations who have lived thru such things, and see how “valid” they find it.
And how’d all those Nations that implemented Jubilee Year Debt Forgiveness fare over the next 10, 25, 50, to 100 years after the holiday? Did any of them survive?
And finally, how well has ANY culture or civilization done throughout history to prevent the rise of an “oligarchic elite”?
Well Jeff, maybe when RT is allowed back on TV, and Chris Hedges is interviewing Hudson again, he will invite you on to debunk the Professor of Economics at the University of Missouri–Kansas City, researcher at the Levy Economics Institute at Bard College, former Wall Street analyst, political consultant, commentator and journalist. I can’t wait.
I love Jimmy’s introduction here…
“Hi all you viewers who still think Joe Biden gives a shit about you!”
Cancelling student debt is good for Harvard as they can raise tuition without touching their $50 billion endowment. So their business school is all for it. Whoopee! Party hardy!
i feel contrite and am reluctant to admit that w/ harvard’s 50 billion$ endowment, their financial aid office did provide our son firth w/ a full-tuition scholarship, augmenting what he needed for room and board by offering him a teaching fellowship in their earth & planetary science dept. and a research fellowship in their astronomy & astrophysics dept…. degrees he has used to teach, lecture, and give presentations at universities, colleges, and dept. of education trainings for 10 years throughout these philippine islands. he has never earned more than 9,000$US/annum in these endeavours, despite being a touted, magna-cum-laude, ‘ben-trovato’ harvard graduate. admittedly, this is possible b/c he has no family to support, seems to survive on air, and lives more frugally than most local filipinos. harvard’s 50 billion$ endowment did not drag firth’s leash to wall street, law school, med school, the silicon valley, banking enterprises, or NASA; it led him to working in a depauperate country among those ‘less blest’ than himself, at least in terms of the propined opportunities w/ which 99% of filipinos would never be endowed.
LikeLiked by 1 person
Oh well, what the hell. If nothing else, it will give the lawyers some more business, eh… ?
BIDEN’S STUDENT LOAN FORGIVENESS COULD TEST LEGAL POWERS
by Jacob GershmanFollow and Gabriel T. RubinFollow
Different administrations have offered conflicting views about the president’s authority, though it isn’t clear who would have standing to sue
President Biden’s student loan forgiveness plan could be the latest legal test of the administration’s emergency executive powers during the pandemic.
IF THE WHITE HOUSE PLAN IS CHALLENGED IN COURT, its lawfulness could hinge on the education secretary’s powers under a 2003 federal statute that gives the head of the Education Department the capability to waive or modify federal student-loan provisions during war or a national emergency.
Continued at https://www.wsj.com/articles/bidens-student-loan-forgiveness-could-test-legal-powers-11661464668
Note: That “IF THE WHITE HOUSE IS CHALLENGED” should read “NOT IF, BUT WHEN… .”
You nailed it, Bill, when You said that this whole thing is just part of the White House and Democrats’ drive to not merely survive the Midterm elections, but to thrive. It’s a Great way to pick up at least some votes. Sort of like the January 6 Committee Circus [with new hearings just in time for November 8].
In any event, the three questions i have about the Student Debt Deal are:
If, by Executive Order, Biden can cancel a portion or all of America’s Student Debt, what other Debts or Financial Obligations can he similarly cancel? Home Mortgages and Car Payments? Credit card Debt? Rent and Electricity Bills?
Who is actually benefitting from all this; ie “CUI BONO?,” as they used to say in Rome? And Who is NOT benefitting from any of this; ie, “CUI MALO?,” as the lawyers all say today?
Who actually IS going to pay off that Student Debt when it starts coming due as part of the ever-burgeoning National Debt?
And of course the Republicans don’t play silly games in election years to pick up a few votes eh Jeff? LOL
My understanding is that the legal provision that allows Biden, by Executive Order, to cancel a portion or all of America’s Student Debt comes from the Higher Education Act. Originally signed in 1965. Specifically, the law grants a presidential administration, via the Education Secretary, authority to “enforce, pay, compromise, waive, or release” government-held federal student loans.
This Act does not allow, or set precedent for, cancelling of any other Debts or Financial Obligations like Home Mortgages and Car Payments. Or Credit Card Debts. Or Rents. Or Electricity Bills. But good try anyway!
As for your last three questions – you obviously were not paying attention to what Professor Hudson was explaining in my above link. Go look at the video again if you are really interested in answering these questions.
Don’t put words in my mouth, Dennis. Election years in America are nothing but obscenely silly games in which the Citizens get to pretend that anybody running for office ~ Republican, Democrat, Other ~ actually, really cares about what happens to those Citizens, their Families, Schools, Jobs, Health Care, and so forth.
And election years are very, VERY lucrative for all those folks getting and dealing in all that money that Fuels the Machine and Feeds the Monkey.
Also, what is You source for Your “understanding of the legal provision regarding Biden and his Executive Order”? Do You have one; or do You just know all this?
And finally, You are correct: i wasn’t paying attention to what Professor Hudson said because i didn’t watch and listen to the video at all; for the simple reason that i have much more important and relevant things to tend to.
Bottom line: i’m really not interested in what he has to say any more than You are interested in what the Economists i cited had and have to say.
Ahhh Hypocrisy…; Thy name is American Politics. Makes You wonder how many Democrat Senators and Reps got their PPP loans forgiven as well, eh?
WHITE HOUSE PUTS REPUBLICANS’ LOAN FORGIVENESS HYPOCRISY ON BLAST by Josephine Harvey
The White House on Thursday publicly called out Reps. Marjorie Taylor Greene (Ga.), Matt Gaetz (Fla.) and other Republican lawmakers who criticized student loan debt relief but benefited from debt forgiveness of the Paycheck Protection Program (PPP) loans during the pandemic.
“Congresswoman Marjorie Taylor Greene had $183,504 in PPP loans forgiven,” the White House tweeted, sharing a link to the lawmaker complaining on Newsmax that it’s “completely unfair” for the government “just to say ‘ok’ your debt is completely forgiven.”
In 2020, her family’s construction company received upward of $182,000 in loans that did not have to be paid back, according to a ProPublica database. Including interest, the total amount forgiven was $183,504. Greene’s office did not immediately return a request for comment Thursday.
Continued at https://www.huffpost.com/entry/white-house-marjorie-taylor-greene-debt_n_6307f30de4b01068e1492246
I should have applied for a big PPP loan for the high operating costs of “Bracing Views.”
Boy, was I dumb!
Heh. And if You had all the right connections there in Swampland, it would have been a done deal.
In the New York Times today:
“WASHINGTON — The big winners from President Joe Biden’s plan to forgive hundreds of billions of dollars in student loans are not rich graduates of Harvard and Yale, as many critics claim.
In fact, the benefits of Biden’s proposals will largely go to the middle class. According to independent analyses, the people eligible for debt relief are disproportionately young and Black. And they are concentrated in the middle band of Americans by income, defined as households earning between $51,000 and $82,000 a year.
The Education Department estimates that nearly 90% of affected borrowers earn $75,000 a year or less. Ivy League graduates make up less than 1% of federal student borrowers nationwide.
Economists say the full scope of Biden’s plan, including significant changes meant to reduce the payments that millions of borrowers will make for years to come, will help middle-income earners from a wide range of schools and backgrounds.
“You’ll have a lot more people who are making zero payments and will have significant loan forgiveness in the future,” said Constantine Yannelis, an economist at the University of Chicago’s Booth School of Business. “The relief to borrowers is going to be more targeted to the people who really need it.”
And the remainder of the piece is a mish-mash of pros and cons – all in all, a pretty poor article from even the New York Times!
David Stockman on THE MOTHER OF ALL DEBT JUBILEES [Extracts]:
The Penn Wharton Budget Model estimates that canceling $10,000 for borrowers earning up to $125,000 will COST ABOUT $300 BILLION. The Pell grant addition could increase this by AS MUCH AS $270 BILLION. The four-month freeze on payments will cost $20 BILLION ON TOP OF THE ROUGHLY $115 BILLION THAT UNCLE SAM HAS ALREADY LOST TO THE MORATORIUMS TO DATE.
WORSE THAN THE COST IS THE MORAL HAZARD AND BALEFUL PRECEDENT THIS SETS. THOSE WHO WILL PAY FOR THIS WRITE-OFF ARE THE TENS OF MILLIONS OF AMERICANS WHO DIDN’T GO TO COLLEGE, OR REPAID THEIR DEBT, OR SKIMPED AND SAVED TO PAY FOR COLLEGE, OR CHOSE LOWER-COST SCHOOLS TO AVOID A DEBT TRAP.
As the man said, this is A COLLEGE GRADUATE BAILOUT PAID FOR BY PLUMBERS AND FEDEX DRIVERS.
Likewise, COLLEGES WILL ALSO CAPITALIZE BY RAISING TUITION TO CAPTURE THE WRITE-OFF WINDFALL. As the Wall Street Journal noted: “White House fact sheet hilariously says that colleges will ‘have an obligation to keep prices reasonable and ensure borrowers get value for their investments, not debt they cannot afford.’ ONLY A FOOL COULD BELIEVE COLLEGES WILL DO THIS.”
Actually, this is no laughing matter. After the student loan and grant bonanza took off in the early 1990s, tuition costs shot the moon. WHEREAS THE CPI ROSE BY A CUMUL’ATIVE 106% DURING THE PAST 27 YEARS, TUITION COSTS ROSE BY 270%.
Continued at https://www.davidstockmanscontracorner.com/the-mother-of-all-debt-jubilees/ [EMPHASES added.]
The weird and wonderful soap opera that is American politics eh!……..
“With his reelection against a little-known GOP state senator more or less assured, California Gov. Gavin Newsom waded deeper into the politics of far-away Florida with his Thursday announcement of a $100,000 donation to the Democrat running against Republican Gov. Ron DeSantis.
The donation to Charlie Crist, a former Republican governor of Florida now running for his old job as a Democrat, follow’s Newsom’s July 4 weekend ad buy in the Sunshine State in which he criticized DeSantis, a rising GOP star and potential 2024 presidential candidate in a race Newsom is rumored to be eyeing.
“For a governor to be taking his money and parking it in someone else’s race is unusual,” said political analyst Bill Whalen, a Hoover Institution fellow who worked in former Gov. Pete Wilson’s administration and consulted for former Gov. Arnold Schwarzenegger and former Los Angeles Mayor Richard J. Riordan.
“Time to make Ron DeSantis a one-term governor,” Newsom said on Twitter of his potential presidential rival, announcing “I’m pledging $100k right now” to Crist. “Who will join me in helping Charlie become the next Governor of Florida?”
Newsom has said he’s not running for president and that Vice President Kamala Harris should be President Joe Biden’s successor as the Democratic Party’s nominee. But polls have shown both Biden and Harris to be unpopular, even among Democrats, and Newsom often is mentioned as an alternative should Biden and Harris bow out.
Crist tweeted a thank you to Newsom for his “generosity and support.”
DeSantis hasn’t commented on Newsom’s donation to his reelection rival on Twitter. But his campaign spokesperson, Christina Pushaw, dismissed the threat from Newsom.
“Who needs opposition research when your opponents are like this,” Pushaw tweeted Thursday.”
For me, the big scandal is the lack of federal and state funding for education, combined with the rising costs of higher ed, which combine to drive tuition costs into the stratosphere.
In many European countries, and in the U.S. after WW2 with the GI Bill, higher ed was and is affordable. But federal and state funding has greatly declined over the last 50 years, with costs diverted to the consumer, i.e. the students. States would rather fund prisons and massive police forces; the feds want more missiles and jets and wars; and education is seen in the U.S. as a form of luxury that you must go into debt for.
The other part: Colleges and universities have changed. Administrative bloat. Olympic-sized pools and water parks. Dormitories that look like 5-star hotels. Lots of “investment” in football stadiums and the like. Colleges and universities compete with each other to recruit consumers and customers, what we used to call students, and those fancy dorms and giant stadiums come at a cost.
Professors, meanwhile, are increasingly underpaid adjuncts who probably don’t even get health care benefits.
We talk about student debt in the U.S. without addressing WHY there’s so much debt. We as a society have made certain choices, and those choices can be changed, but too many people are making too much money with the way things are.
And that will continue because Biden’s modest debt forgiveness program changes nothing with respect to the cost drivers here.
We need to explore, examine, and explain not only why there is so much Student Debt, Bill; but also why there is so much of all the other kinds of Debt, as well. Particularly Government Debt; but every other form, as well:
[Figures in TRILLIONS of Dollars]
Federal Government Debt 30.7
State Government Debt 1.2
Local Government Debt 2.1
Student Loan Debt 1.8
Credit Card Debt 1.1
Total Personal Debt 23.6 Mortgage and Consumer Debt, including Car Loans
Total US Debt 92.3 Household, Personal, Business, Financial Institutions, and Federal, State,
and Local Gvt Debt
In addition to all that, the Federal Government currently has $171.1 TRILLION in UNFUNDED LIABILITIES for Social Security, Medicare. Federal Debt held by the Public, and Federal Employee and Veterans Benefits.
And we do all this with a GDP of only $ 24.8 Trillion.
Well, you can’t accuse Americans of being savers!
Haven’t you heard, Jeff, that mortgages are “good” debt? Until you default on your mortgage, that is.
I’m skeptical of the figure for “unfunded liabilities.” How is that calculated? Over what time period? How is social security “unfunded” when it’s taken out of people’s paychecks?
That huge figure of $171 trillion: Well, I suppose the government could simply stop paying social security, medicare, veterans benefits, and the like. Open poor houses again. We certainly have plenty of prisons — put the debtors in there. Big rocks always need pummeling into smaller ones.
Here’s some background information on those UnFunded Liabilities and how they are calculated:
WHAT ARE UNFUNDED LIABILITIES? https://www.thebalance.com/unfunded-liabilities-definition-and-examples-4159564
YOU OWE MORE THAN $500,000 — AND COUNTING https://thehill.com/opinion/finance/585679-you-owe-more-than-500000-and-counting/
Part of the problem with Social Security is that ~ with longer lifespans ~ people are collecting more from Social Security than they contributed over their working career. Plus ~ compared to how it has been in the past, there are less and less people making payments to SS compared to how many more are receiving benefits than it has been in the past.
I’m suspicious of that huge number, Jeff. It’s the kind of “Holy Shit!” number that can be cited by the owning class so they can make major cuts to social security and Medicare in the name of “fiscal responsibility.”
We’ve already lost a million, mostly older, people to Covid-19. That should ease the burden. Maybe they’ll just concoct a new virus to kill off the seniors among us for the benefit of the young and rich — let’s call it “Soylent Green.”
i’m suspicious of any numbers coming from this government, but those SS numbers come from the SS Administration. Do You think those folks at SSA would cook their own books so as to give The Ruling Elite an excuse to gut their own agency? i have a hard time believing that.
Here’s another look at the numbers and the mechanics at work re SS: WILL BABY BOOMERS BANKRUPT SOCIAL SECURITY? at https://www.investopedia.com/articles/personal-finance/022516/will-baby-boomers-bankrupt-social-security.asp
Cash in your social security before you cash in your chips — is that the lesson here? 🙂
You bet and it’s a good lesson. After 48 years in harness, I took an “early” retirement at 62. Doing so cost me 25% of my benefit, 25% of what I paid in. How can that be right? But it has been worth it, no regrets. A 25% cut, kids … just doing my part.
Biden has his mojo back! Well, that’s the new narrative as the fall elections approach:
The Babylon Bee sees and knows all:
Hi Alex: The Babylon Bee needs to improve their satire.
The mythical “Chloe Martin”: If she had really grown up in the Hamptons, she wouldn’t take one look at Boston University (heck, I was accepted there). She’d be attending Yale, or Harvard, or Columbia. And she wouldn’t need student loans. She’d have a private college fund and plenty of spending money too.
She might major in Gender Studies, but her rich family and friends would ensure a lucrative job, probably in New York City or maybe a provincial city like Boston.
Believe me, the Chloes of the world in the Hamptons don’t need any debt relief from Joe Biden.
And Nancy Pelosi wants equal time:
In todays Washington Post:
WASHINGTON — President Joe Biden had doubts. In private conversations with White House staffers and allies in Congress this spring, he said he worried that voters who’d never gone to college could resent a move to cancel huge amounts of student debt, according to four Democratic officials who spoke on the condition of anonymity to reflect private talks. Biden also said that the federal government should not be bailing out Ivy League graduates, and that his children should not qualify for help, two of the officials said.
“He was nervous about how it would play with working-class people,” one senior Democrat said, recalling the president’s comments at a meeting this spring.
But a relentless campaign was pressing Biden to embrace dramatic action: There were private appeals aboard Air Force One, the courting of first lady Jill Biden, months of political and economic arguments from senior White House staffers, and warnings by Black lawmakers about the dangers of doing too little. In the end, Biden came around. He didn’t just wipe out up to $20,000 in debt for most borrowers, an amount many activists had thought unlikely. He also defended the notion with passion from the bully pulpit Wednesday.
The result is one of the most significant changes to American higher education policy in decades — and a new cornerstone of the president’s economic legacy. Biden’s decision will dramatically change the financial circumstances of tens of millions of Americans, fully erasing the student loans of roughly 20 million people.
ITS POLITICAL WISDOM WILL IMMEDIATELY BE PUT TO THE TEST, WITH REPUBLICANS SEIZING ON IT AS A KEY OF THEIR 2022 MIDTERM CAMPAIGN MESSAGE (emphasis mine)
< i will defer to what this group of former Chiefs of Staff, Secretaries of State and Defense, and National Security Advisers have to say about one element ~ the National Security aspect ~ of the Threat and Danger that Deficit Spending, the surging National Debt, and all those UnFunded Liabilities present to America.
< It should be noted that they are NOT concerned with the Threat and Danger to civil society, the economy, and the political order posed by these Deficits, Debt, and Liabilities. National Security is focus enough for them.>
NATIONAL SECURITY EXPERTS SOUND ALARM ON LONG-TERM DEBT by Kristina Wong ; The Hill, 10 May 2016
A bipartisan group of prominent national security figures on Tuesday will call on U.S. leaders to reduce the country’s long-term debt, which they consider the greatest threat to the nation’s security.
“As individuals who have served the nation in both international and domestic leadership roles, we continue to believe that our long-term debt is the single greatest threat to our national security,” the group said in a statement, first obtained by The Hill.
The group warns that federal debt is projected to climb to 131 percent of the nation’s GDP over the next 25 years.
[NOTE: They definitely got this right back in 2016… . “THE UNITED STATES GOVERNMENT DEBT IS ESTIMATED TO HAVE REACHED 137.20 PERCENT OF THE COUNTRY’S GROSS DOMESTIC PRODUCT IN 2021.” Source: Office of Management and Budget, The White House https://tradingeconomics.com/united-states/government-debt-to-gdp ]
“This debt burden would slow economic growth, reduce income levels, and harm our national security posture,” the statement says. “It would inevitably constrain funding for a strong military and effective diplomacy, and draw resources away from the investments that are essential for our economic strength and leading role among nations.”
The group, COALITION FOR FISCAL AND NATIONAL SECURITY, is chaired by retired Navy Adm. Mike MULLEN, former chairman of the Joint Chiefs of Staff, and includes former Secretaries of State Madeleine ALBRIGHT and Henry KISSINGER, former Defense Secretaries Robert GATES and Leon PANETTA, and former National Security Advisers Zbigniew BRZEZINSKI and Brent SCOWCROFT.
“The health of the country, the prosperity we care about, and the security we care about are just inextricably linked … and WE KEEP LOOKING AWAY HOPING IT WILL GET BETTER, AND IT GETS WORSE,” said Mullen in an interview with The Hill ahead of the statement’s release.
“IT’S ABOUT THE DEBT LEVELS, AND THE INABILITY TO PAY OUR OWN BILLS, AND IF WE DON’T GET OUR FISCAL HOUSE IN ORDER, IT’S GOING TO DRAMATICALLY AFFECT OUR SECURITY OF OUR COUNTRY,” he said.
The group, put together by the Peter G. Peterson Foundation, plans to discuss economic and defense reform proposals outlined in its statement at an event in Washington on Wednesday, billed the Fiscal Summit.
Noting that the 2016 Election campaign was just getting launched, Mullen said he would leave it up to the American people to decide which presidential candidate could best lead these reforms.
“You never know what one administration’s going to do versus another. I do think the timing of this is important: one, because it has a chance to register in both campaigns; two … IT IS SUCH A MAJOR ISSUE THAT JUST GETS WORSE YEAR AFTER YEAR — THE INCREASING SIZE OF THE DEBT, AND AT SOME POINT AT TIME, THE AMERICAN PEOPLE AND THE LEADERS IN D.C. ARE GOING TO HAVE TO DEAL WITH IT,” he said.
The statement concluded: “As we confront determined and dangerous foes, WE CAN NO LONGER DELAY THE NECESSARY CHOICES. WE NEED LEADERS WHO ACT IN THE LONG-TERM INTERESTS OF OUR NATION, AND ARE WILLING TO PUT ASIDE PERCEPTIONS OF SHORT-TERM POLITICAL RISK IN FAVOR OF LONG-TERM SECURITY GAINS.”
Full article at https://thehill.com/policy/defense/279320-prominent-group-says-long-term-debt-the-single-greatest-threat-to-us-national/ [EMPHASES added.]
NOTE: Admiral Mullen made headlines back in August, 2010 when, as Chairman of the Joint Chiefs of Staff, he told CNN: “The most significant threat to our national security is our debt,” he told CNN Wednesday. “And the reason I say that is because the ability for our country to resource our military — and I have a pretty good feeling and understanding about what our national security requirements are — is going to be directly proportional — over time, not next year or the year after, but over time — to help our economy.
That’s why it’s so important that the economy move in the right direction, because the strength and the support and the resources that our military uses are directly related to the health of our economy over time.”
Given the fact that Deficits, the Debt, and UnFunded Liabilities was not even a minor issue discussed during the campaigns in 2016 or 2020 indicates how seriously the rest of the Ruling Political Elite took these comments by their fellow travelers.
Maybe there is a lesson for you there Jeff! Maybe you too should stop fretting and ruminating about Deficits, the Debt, and UnFunded Liabilities, and get away from your keyboard and go enjoy the rest of your life. Your posting a gazillion times on internet websites is not going to make a difference to the World!
So much ex cathedra chatter: my guy’s better than your guy, favored bloggers, links to the right of me, links to the left of me … and no middle ground.
The only thing anyone can agree on is that the public – who bear the burden of trying to knock a digit or two off the national debt – don’t pay enough attention, are willfully ignorant, or simply flat out don’t care.
Well, here’s a tip from someone who still wonders who was affected by the “crash” of 2008 (I wasn’t and neither was anyone I know. Was that a rich folks dilemma? Never came to my neighborhood.)
It shouldn’t take a theoretical economist to realize that the dollar amounts being bandied about are like interstellar distances: so great they are beyond comprehension in the non-theoretical, day-to-day.
The “T-word” just turns people off, as the “B-word” eventually did.
If the government doesn’t care enough to do anything about the national debt, why should anyone else?
“If the government doesn’t care enough to do anything about the national debt, why should anyone else?”
That’s a DFQ, BUTSUDANBILL; a Damn FINE Question.
But first of all: How can the government ~ specifically, the politicians, bureaucrats, and appointees who run it and the Special Interests who own and operate them ~ how can that government “care” about the National Debt?
Particularly given the facts that: 1] It ~ the government ~ is the sole source and cause of that Debt; and 2] Having and perpetually building that Debt is the only way this government ~ and those who run it ~ can stay in business.
In any event, the primary reason “anybody else” should care about that Debt is that some day, the Bill Collector for that Debt is going to show up and demand payment. And the only way the government will be able to pay that Bill will be by either dramatically raising taxes and other sources of revenue, and/or by selling government property.
When the Debt comes due, the government ~ again, specifically, the politicians, bureaucrats, and appointees who run it and the Special Interests who own and operate them ~ will not suffer at all.
But anybody else who is not part of America’s Ruling Political-Economic Elite will have to deal personally and socially with the consequences of living in a Nation in Financial Default. And that won’t be pretty.
That’s why anybody ~ make that Everybody ~ else should care about the Debt. Because the government can’t. And even if it could, it wouldn’t and won’t.
Well, jg, I think that was more of a rhetorical question than anything, posed by an anonymous “everyman” taxpayer when confronted with warnings about the national debt. Apologies for the lack of clarification. As I put it to one of my ex-wives when she asked to borrow a hundred until the next payday because paying on her credit cards left her just this side of tapped out, “Not unless you put that plastic away for a couple of months (we were young, yes, and it was only two cards, but back then -1974 – it didn’t take much to put you in a bind).”
You and I know the government can’t even fake an interest in cutting down the debt, it goes against everything they stand for and certainly represent: “What’s the national debt now? Really? Then what’s another hundred of those F-35s?”
In a scene in “The Dark Knight” The Joker has just set millions of dollars – in cash – on fire. Silhouetted against the flames he says, “It’s not about the money. It’s about sending a message.” In the gubbmint’s case, the message is always the same, whether in regard to the national debt or sustaining forever wars: “We don’t care and we don’t have to.”
Rhetorical or not, BUTSUDANBILL, it is still a DFQ, and is a Question about the Debt that a critical mass of Americans need to start asking themselves and each other while the opportunity still exists. No need to apologize at all.
And they need to ask the same Question about The Forever Wars.
Yes — for all this chatter about the national debt by admirals and generals, they sure do seem to be happy with their ballooning Pentagon budgets. In fact, they always want MORE.
Heh. Well, Bill, it was just one Admiral [Muller], and no Generals.
But it did include two former Secretaries of State and Defense, and two past National Security Advisers; all of whom have always been very happy to see ballooning budgets for the military-industrial-congressional complex and the surveillance-secrecy-security panopticon.
As i noted about the Coalition For Fiscal And National Security’s statement: Their focus was entirely and only on the national security implications of the Debt; not on its potential impact on civil society, the economy, or the political order.
That 2010 CNN article about Mullen continued with him saying: “That’s why it’s so important that the economy move in the right direction, because the strength and the support and the resources that our military uses are directly related to the health of our economy over time.”
And just for context, the article also noted: “The wars on Iraq and Afghanistan have contributed to a more than doubling of the Pentagon budget, which has jumped from $300 billion to $664 billion since 2000.”
Twelve years later, we can now claim that that budget has almost tripled since 2000.
Jeff, go Google a graph of the increase of the Debt over the last 100-years. And note the trend. That the US does nothing to change this trend in your lifetime, and probably in my kids lifetime, is not going to impact on civil society, the economy, or the political order. Corrections will be made when and only when they are needed. The world will not come to an end! Relax, step away from your keyboard and go out and enjoy one more beautiful sunny day. You are tilting at windmills my friend.*
*wasting time fighting enemies or trying to resolve issues that are imaginary, not as important, or impossible to overcome.
ok, that’s enough, dear den; a subauditum condescension and not-so-subtle acrimony are threatening to vitiate wja’s comment section. w/ certitude, none of us is seeking comity at wja’s site. however, diplomacy and sedulous searches for concinnity of our disparate biases are appreciated. one might consider that jg’s ‘inspiration’, literally and figuratively, of/by floral redolences are as exquisitely esteemed as yours.
A different perspective on the subject of Student Loan Debt… :
STUDENT LOAN DEBT IS AN AMERICAN MALIGNANCY BORN OF RONALD REAGAN by Thom Hartmann
President Joe Biden just made good on his campaign promise to forgive billions in student debt. Republicans, predictably, have gone nuts.
When you search on the phrase “student debt forgiveness” one of the top hits that comes up is a Fox “News” article by a woman who paid off her loans in full.
“There are millions of Americans like me,” the author writes, “for whom debt forgiveness is an infuriating slap in the face after years of hard work and sacrifice. Those used to be qualities we encouraged as an American culture, and if Biden gets his way, we’ll be sending a very different message to the next generation.”
This is, to be charitable, bullsh*t. Forgiving student debt is not a slap at anybody; it’s righting a moral wrong inflicted on millions of Americans by Ronald Reagan and his morbidly rich Republican buddies.
When you invest in your young people, you’re investing in your nation.
Student debt is evil. It’s a crime against our nation, hobbling opportunity and weakening our intellectual infrastructure. Any nation’s single biggest asset is a well-educated populace, and student debt diminishes that. It hurts America.
Student debt at the scale we have in America doesn’t exist anywhere else in the rest of the developed world.
Continued at https://www.commondreams.org/views/2022/08/26/student-loan-debt-american-malignancy-born-ronald-reagan
you are to be roundly and soundly applauded for your exhortation, jg moebus. the US higher education system of burdening students, particularly those from depauperate families, is an exorbitant, heinous fardel for young americans to shoulder. it is a system implemented, promoted, and intransigently governed by self-serving troglodytes whose medieval actions are traitorous, given that every enlightened country’s leaders are well aware the long-term strength and health of a country is founded on funding educational opportunities for their young citizens, across the board… as is the case in finland, norway, sweden, denmark, and other civilized countries. even in canada, the govt still subsidizes 75% of university fees for their college and university students, w/out which only the affluent would be able to support higher education for their children.
yes, some canadian students have been seduced into taking out low-interest loans for uni, but b/c the loans are available from the banks w/ such facility, they are expending those funds unnecessarily, w/ impunity, not on their uni fees and basic comestibles, but on luxury flats, exotic vacations, cars, fashionable clothes, bars and restaurants, hoping to pay the piper later, after they graduate. it has become a disease of the unbridled consumerism and banausic materialism among north americans that i would like to assume is prevalent among a minority of canadian students in our neoteric generations.
Hi Jeannie. Thanks for the kudos, but all i did was forward that article. The accolades go to Mr Hartman.
But i’m curious: What did You think of David Stockman’s piece?
oops, an embarrassing solecism here, jg: i did not read the article you refer to by david stockman. in fact, i had no idea who he was until you alerted me to his name just now, which then inspired an oeillade about stockman in wikipedia via the google search engine. at 81, sporting severe visual-acuity deficiencies after 5 failed corneal transplant surgeries, it is a challenge for me to waft a mere ‘coup d’oeil’ over the individual commenters’ remarks. commensurately, i do not have the luxury of subjecting that visual sensorium to commenters’ interjected articles at different blog-sites. my obnubilated sight squeezes intense pain into the skull after a frustrating dearth of sentences. in any case, plaudits to both you and hartman are well-deserved, and by association, to sir stockman.
Thank You, Jeannie. have a Great day.
And then here’s another perspective… :
STILL MORE FREE STUFF FROM WASHINGTON by David Stockman [who was mentioned in the above different perspective]
And it’s gone!
We are referring to the $300 billion of taxpayer funds that will go down the tubes at the stroke of Joe Biden’s pen upon his impending cancellation of $10,000 of student debt. And in the case of married couples, that covers households with incomes up to $250,000!
That’s right. Only 37% of Americans have a 4-year college degree, only 13% have graduate degrees and just 3% have a PhD or similar professional degree. Yet a full 56% of student loan debt is held by people who went to grad school and 20% is owed by the tiny 3% sliver with PhDs.
So Biden’s debt cancellation plan to would amount to taking money from a plumber to pay the debt of a lawyer.
Not surprisingly, student debt outstanding and share of debt repayments (prior to the Covid moratorium, which is still in effect and likely to be extended thru year end by Biden) is highly skewed to the upper end of the income ladder.
Thus, the highest-income 40 percent of households (those with incomes above $74,000) owe almost 60 percent of the outstanding education debt and make almost 75% of the payments. By contrast, the lowest-income 40 percent of households hold just under 20 percent of the outstanding debt and make only 10 percent of the payments.
Continued at https://www.davidstockmanscontracorner.com/still-more-free-stuff-from-washington/
From todays New York Times:
“Analysis | Biden’s big dreams meet the limits of ‘imperfect’ tools
WASHINGTON — President Joe Biden’s move this past week to cancel student loan debt for tens of millions of borrowers and reduce future loan payments for millions more comes with a huge catch, economists warn: It does almost nothing to limit the skyrocketing cost of college and could very well fuel even faster tuition increases in the future.
That downside is a direct consequence of Biden’s decision to use executive action to erase some or all student debt for individuals earning less than $125,000 a year, after failing to push debt forgiveness through Congress. Experts warn that schools could easily game the new structure Biden has created for higher education financing, cranking up prices and encouraging students to load up on debt with the expectation that it will never need to be paid in full.
It is the latest example, along with energy and health care, of Democrats in Washington seeking to address the nation’s most pressing economic challenges by practicing the art of the possible — and ending up with imperfect solutions.
There are practical political limits to what Biden and his party can accomplish in Washington.”
Comments are closed.