Student loans. Biden pressed to cancel $50,000 per borrower, he wants to cancel $10,000

[Demovictory9]

https://www.nytimes.com/2020/12/10/us/politics/biden-student-loans.html?action=click&module=Top%20Stories&pgtype=Homepage

Student Loan Cancellation Sets Up Clash Between Biden and the Left
Democratic leaders are pressing the president-elect to cancel $50,000 in debt per student borrower by fast executive action, but he wants Congress to pass more modest relief.


WASHINGTON — President-elect Joseph R. Biden Jr. is facing pressure from congressional Democrats to cancel student loan debt on a vast scale, quickly and by executive action, a campaign that will be one of the first tests of his relationship with the liberal wing of his party.

Mr. Biden has endorsed canceling $10,000 in federal student debt per borrower through legislation, and insisted that chipping away at the $1.7 trillion in loan debt held by more than 43 million borrowers is integral to his economic plan. But Democratic leaders, backed by the party’s left flank, are pressing for up to $50,000 of debt relief per borrower, executed on Day 1 of his presidency.

More than 200 organizations — including the American Federation of Teachers, the N.A.A.C.P. and others that were integral to his campaign — have joined the push.

The Education Department is effectively the country’s largest consumer bank and the primary lender, since 2010, for higher education. It owns student loans totaling $1.4 trillion, so forgiveness of some of that debt would be a rapid injection of cash into the pockets of many people suffering from the economic effects of the pandemic.

[Hortensis]

1. Well, elections have consequences and 2016's is still destroying us.

We don't yet know IF we can undo what it did to our nation. Currently 18 states are seeking to disenfranchise the entire populations of 4 states that elected Biden.

Since then, our nation has been plunged much farther in debt than it has ever been, and the bills on top of that for this pandemic and its effects alone will be enormous.

And this election did not give us a majority in the senate. (Yet, hope, hope, hope!!!)

So, yeah, it makes sense if we're cutting back on how much student debt we can assume right now. That's not the only very important goal we're forced to cut back on.

On the plus side, there are other things we can do, such as assist those who haven't been able to far to refinance at today's extremely low rates, give business incentives to assume student debt, arrange income-based debt payments and temporary moratoriums, give forms of debt relief for starting a business, including government assumption up to certain amounts for socially beneficial businesses. All things that would have been done 4 years ago, besides any actual debt assumption.

Regarding those who'll complain that this isn't nearly enough but refused to vote or voted third party, probably best to just take a deep breath and walk away. Understandable if control snaps.

[cherish44]

2. I have a niece who was offered a full ride scholarship to a state university

She didn't want to go to a lowly state school but rather a prestigious private school. She's now 35 and still playing off her six figure student loan debt. She got the same damn degree that should could have gotten for FREE at the state school. With my dad, if I had been offered a full ride scholarship to Pig Knuckle State University he'd be saying "That's where you're going."

[BSdetect]

5. Nobody is forced to go to university and get into debt.

They do that mainly in the hope of earning enough to pay off any loans.

I'd like to be reimbursed for the cost of putting three kids thru uni without debt. That will never happen.

It was hard and meant quite some sacrifice but we decided that long term student loan debts were a curse.

Sure, use our tax money to pay off the debts of people who make the wrong choice.

Maybe I can buy a car that I can't afford hoping I can get a refund some day?

A friend took years to wean his only son off credit card debt. Its a nasty system that ensnares the vulnerable.

[Buckeyeblue]

3. What if he gave borrowers a choice...

He could knock an immediate $10K off the balance of their loan (if your balance is 30K or higher). Or, borrowers could elect to have their loan frozen for 3 years, where no interest would accrue and no payments would need to be made.

I'm not necessarily for having $50K knocked off the balance for everyone. An education is an investment. People who have college degrees earn more and have more opportunities over their lifetime.

[ProfessorGAC]

4. $10,000 Is A Pretty Big Deal

Per Credible dotcom, the average interest on undergrad loans is 4.66%. It's 1.5-3% higher for loans on grad studies and PLUS loans.
On average, forgiving $10,000 saves the borrower $39 per month. That doesn't count the savings on reduced principal.
Might not sound like much, but for someone being heavily squeezed by debt, that extra nearly 40 bucks could be big.
The overall average is 5.4%. $45 per month in interest alone, every month.
For commuters, that's 2 or 3 weeks of gas to get to work, that they were paying anyway.
Like I said, might seem like peanuts to some, but could be huge relief to a lot of indebted former students.

[MichMan]

7. Why was interest included in the 2010 Student loan legislation in the first place?

There was absolutely no good reason it wasn't set up as 0% from the beginning.

[ProfessorGAC]

8. Good Point

Or at least some nominal amount to cover administrative cost, but not to generate a profit.
I saw numbers as high as 7.8% on PLUS loans. One could get a car loan for under half that! Cars wear out. Education doesn't depreciate.

[DeminPennswoods]

6. For decades Biden represented Delaware

that's home to many major banks and credit card companies. Old habits will be hard to break, but perhaps Dr Biden will have some influence on this issue.