Loan Forgiveness Is Not President Biden Action Alone

Discussion in 'General Distance Learning Discussions' started by MaceWindu, Aug 28, 2022.


Who Else Needs To Help Lower The Cost Of A Degree?

Poll closed Sep 4, 2022.
  1. Colleges & Universities (lower tuition)

    8 vote(s)
  2. Community Colleges offer Bachelor’s degrees

    5 vote(s)
  3. State Legislatures

    7 vote(s)
  4. Student Loan Lenders (simple interest instead of compound interest)

    8 vote(s)
  5. Banks (low interests on student loans)

    6 vote(s)
  6. US Congress

    7 vote(s)
  7. Someone else

    4 vote(s)
Multiple votes are allowed.
  1. MaceWindu

    MaceWindu Active Member

    Who else should step up to the plate and make a change to lower the cost of college degrees?

    Any or several? Your own two cents.

    7 Day Poll Included
    Maniac Craniac likes this.
  2. Maniac Craniac

    Maniac Craniac Moderator Staff Member

    I like Rich Douglas' idea of a national qualifications framework.

    I'm less interested in CCs offering Bachelor's than I am with CCs and high schools having more co op programs. Even better, if high schools and CCs shared a campus, they could be more efficient and save costs. Not just for the students and the schools, but also for taxpayers.

    Also, every high school guidance counselor in the country should be required to sign up for both DegreeInfo and DegreeForum, and spend at least an hour a day reading both.
  3. Jonathan Whatley

    Jonathan Whatley Well-Known Member

    I'm concerned about non-academic problems that would arise from fully integrating a high school and a community college all day. e.g., unhealthy mixed-age relationships, very different governance of behavior.
  4. Rich Douglas

    Rich Douglas Well-Known Member

    Let's not call it my idea since it is in practice in many places around the world. Let's say instead that it is my "urging"! :D
    Two of my wife's nephews did their associate degrees this way, graduating from HS and CC simultaneously Both are now engineers.
    Just the politics section!:confused:
  5. LearningAddict

    LearningAddict Well-Known Member

    As long as the federal government continues to lend exorbitant amounts of money to students--and for degrees that have known poor employment and salary outcomes in addition to degrees with good ones--the schools will keep charging exorbitant prices and the cycle will never end. The best thing people can do is learn from the cycle and consider less expensive alternatives for their collegiate education (plenty are out there now) rather than turning their noses up at them because they're not from name brands that will impress total strangers.
    MaceWindu likes this.
  6. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    Mostly agree, with the caveat that just because a school isn't widely known doesn't mean it's not ruinously expensive.

    Federally guaranteed student loans should be eliminated.
    Rachel83az, LearningAddict and JoshD like this.
  7. Rich Douglas

    Rich Douglas Well-Known Member

    Student loans help a tremendous number of people who could not achieve their educational goals without them.

    Perhaps this isn't a binary choice.

    I agree with LearningAddict that so much money pumped into the system tends to drive up prices. We saw that in real estate in the run up to the Great Recession. And it is difficult for borrowers to make informed decisions about what the future may hold for them. It is a long way--chronologically and educationally--from the time you commit to borrowing and the time you (may) begin to receive the returns on your investment. But that doesn't mean the program must be destroyed.

    On a personal level, I'm not angry about the huge amount of money I had to borrow to do my degree. I'm much more irritated at the exorbitant interest rates I've been charged and the fact that 32 years of federal service hasn't helped to cut into it. But, on balance, it remains the single-most important financial decision I've made in my entire life, and I'm grateful for the opportunity.

    Education has always been recognized as a common good--something we pay for socially whether or not we need it personally. There are efforts to destroy that, of course, even at the primary and secondary levels. I wouldn't mind seeing a stronger federal role in all of this to protect consumers and, again, to tame some of the excesses. Something, certainly, must be done to address the problem; forgiving debt alone doesn't do that.
    MaceWindu and LearningAddict like this.
  8. JoshD

    JoshD Well-Known Member

    The great thing about education though is that there are so many choices. I am not sure, even at the age of 30, I will be alive long enough to see a sweeping change in higher education that lowers the cost of degree programs.
    MaceWindu likes this.
  9. LearningAddict

    LearningAddict Well-Known Member

    I agree:

    If one goes to a lesser-known school and it's as expensive as a better-known school then they're not meeting the standard of alternative when it comes to pricing.

    Doubly agree! I didn't want to say it here as I wasn't sure how it would be taken, but yes, I'm in favor of that!
  10. Johann

    Johann Well-Known Member

    Agreed. I don't think, Josh, that you will see such a sweeping change even if you live to 120. Nor, do I suppose, you'll see much long-term lowering in the price of homes, food or anything else that counts.
    MaceWindu and JoshD like this.
  11. JoshD

    JoshD Well-Known Member

    I will also add that I have a friend of mine who ended her education with about $150,000 in student loan debt. 10 years later, after making payments on time every single month, her balance left is about $152,000. Now, I know she was not paying the $1,000 per month or whatever it was but she has always put a good chunk towards it.

    My personal opinion? If the federal government wants to be in the student loan world, they need to eliminate interest rates.
    Suss, MaceWindu, JBjunior and 2 others like this.
  12. Johann

    Johann Well-Known Member

    Right. Maybe they could adopt the Islamic system? :) Works for me...
  13. Maniac Craniac

    Maniac Craniac Moderator Staff Member

    Using an inflation calculator, I found that $150,000 in 2012 dollars is equivalent to over $180,000 in today's dollars. Despite seeing the balance move upward, your friend has actually already paid off a substantial amount of her debt just by staying afloat while inflation takes its natural course. Give it another 10 years, a $150,000 debt would be the equivalent of $117,000 in today's dollars. If she keeps it up, she WILL continue to see progress even if it doesn't look like it in her statement.
    MaceWindu and JoshD like this.
  14. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    The same could be said for car loans helping people reach their transportation goals. But we subsidize mass transit, we don't lend kids the money for Ferraris and then never let them off the hook when they can't pay the money back.

    I get having a program that helps the working class. That's why I wouldn't kill Pell. But guaranteed loans are a middle class entitlement with strong side effects that have proven to be very negative in the long run... hence the current write-off and this very conversation.

    Sure, it could be made less bad, by eliminating interest or restoring normal consumer protections (such as through bankruptcy). But even then, it seems we agree that one of its effects is to create an artificial ocean of money that tuition rates rise to soak up. A guaranteed loan program (even one les crappy than the current one) that does that is akin to breaking someone's leg, handing them a crutch, and saying, "I'm helping!"

    Education has always been recognized as a common good--something we pay for socially whether or not we need it personally. There are efforts to destroy that, of course, even at the primary and secondary levels. I wouldn't mind seeing a stronger federal role in all of this to protect consumers and, again, to tame some of the excesses. Something, certainly, must be done to address the problem; forgiving debt alone doesn't do that.[/QUOTE]
    If angels were in charge, then maybe. But greater federal involvement just sounds like more broken legs and more crutches.

    Heh, as with any public policy statement around here, it will be taken with both strong agreement and strong disagreement. But that's okay.
    Rich Douglas likes this.
  15. Rachel83az

    Rachel83az Well-Known Member

    That's a really strange way of looking at it.
    Dustin likes this.
  16. Johann

    Johann Well-Known Member

    And if there's a 1923 German-style hyperinflation -- her debt will be virtually wiped out. Yeah - for sure that'd help! Your view is in NO way a comforting thought. If it's glacial, barely perceptible (and artificial) progress then it's NOT real progress. Statements can be "true" without making any practical sense, I guess.

    If SENSIBLE people want to reduce their debts - they have to pay them - not rely on inflation. And I'm not against forgiveness. Just against sitting around for years hoping. If it comes, it comes. If it doesn't -- it doesn't.
    Last edited: Aug 30, 2022
    MaceWindu and Rachel83az like this.
  17. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    Is it? There's good reason for phrases like "in real terms" and "adjusted for inflation". Inflation may have serious undesirable consequences, but it does help debtors with fixed-rate loans.

    I have to agree that hoping for the dollar to crash isn't very responsible financial planning. ;)
  18. Rachel83az

    Rachel83az Well-Known Member

    That's money that she could be putting towards a mortgage, a 401k, even stocks & bonds. Most any good investment would result in better returns than "just slightly under inflation values". So, yes, it's really weird to think that a steady loan balance is "good". It's not bad, because it's not growing hugely like some do, but it's not good either.
    MaceWindu likes this.
  19. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    Oh, I see. I wasn't thinking of going to college as someone one would do in lieu of those other things, especially since one can't really use federal loan money for much else (other than the overage one can take out for "living expenses").
    MaceWindu and Maniac Craniac like this.
  20. Maniac Craniac

    Maniac Craniac Moderator Staff Member

    It's less common to look at student loans this way, but it's hardly different than financing a home. If I were going to buy a home, I would heavily consider getting a mortgage even if I had the money to pay it outright. With an excellent credit score, it's possible to borrow money at APR nearly identical to inflation rates, and rarely, even lower. In the end, the money you pay back is less valuable than the money you borrowed and in the meantime, you still have the possession and the use of your money for other investments that can grow at an even faster rate.

    In such a hyperinflation scenario, all bets are off and it doesn't make a difference either way.

    As I illustrated above, "glacial" debt repayment is not always a bad thing and is sometimes a reasonable investment strategy. It's also not artificial. Not at all. It works just like any other investment. If, for example, my home increases in value over 10 years, such that it outpaces inflation, I can sell my home at a profit even if I do absolutely nothing to upgrade it. Whether I sell the same house for a different price than I paid for it, or I pay back my loan with differently valued money than I originally borrowed, I benefit due to how the market evolves over time.

    Depending on their interest rate, it may not work out in the favor of the borrower in the same way I've described above. Most often, clearly, it does not. I would never suggest that just making minimum payments while making no dent in the principal is a good strategy for paying off burdensome loans that are leeching one's available funds for years and years. (In fact, I recently shared an anecdotal cautionary tale cum horror story of that exact scenario in another thread about loan repayment). I was just offering a glimmer of hope that people who are just barely floating above the surface are still making progress, even if it's not the way they would like and even if doesn't feel like it.
    MaceWindu and SteveFoerster like this.

Share This Page