Data about student loan debt comes from an article in The Washington Post. It contains a pair of graphs which show how much college debt is owed by different age groups and what percentage of debtors owe college debts in varying amounts. Only 7% of Americans with college loans owe college loans over 100k. Debts of $20,000 or less are owed by 53% of those with college loans
https://www.washingtonpost.com/education/2022/05/22/student-loan-borrowers/
Experts say that if you owe $100k or more in student loans you’re more likely to pay it off than those with $20k or less. Many students with low debt totals dropped out of college and do not earn enough money to eat, pay for shelter and pay for college loans. Students with over 100k in debt often have jobs that allow them to pay on their student loans regularly or pay them off quickly.
Smaller debts often belong to students who attended public colleges and larger debts to student who attended private colleges.
An article in Forbes gives us five reasons why cancelling student debt might be a good thing.
1. Student loan cancellation will stimulate the economy. When you read through some of the comments below notice how many students had to give up purchases to pay debts. Although America loves a good story about the sacrifices smart people make on their way up the ladder because we apparently believe our younger years should be accompanied by pain and tough lessons learned, it seems clear that having no student debt would affect individual lifestyles quite positively and therefore the economy.
2. Student loan cancellation would help narrow the racial wealth gap. Black and brown families have used college to lift themselves up and then have given a hand to those who are next in line. However, opportunities in our inner cities have limited the lives of many black and brown children who have no one to give them a hand and who often make choices based on what is on offer, choices that make it difficult to leave the inner city unless it is to go to jail. Redlining to stop integration in neighborhoods robbed black and brown families of generational wealth, such as owning a home that would increase in value. What student loan cancellation might do for black and brown students might change their economic trajectory completely.
3. Student loan cancellation could completely forgive student loans for 15 million borrowers if we forgave up to $10k for each borrower. It could help 35 million borrowers if we forgave up to $50k per borrower.
4. Student loan cancellations will help you start your life without student loans.
5. Student loan cancellation would help regular people. Congress has already bailed out corporations and banks and given tax breaks to billionaires. Time to help regular Americans says Forbes.
Some of the complaints Americans have about cancelling student debt are clear from reading the comments quoted below.
1. I paid my debts. I sacrificed and gave up pleasures to pay. It’s not fair if someone comes along and pays the debts of future college students when I had to pay my own.
2. Offering people free stuff turns them into deadbeats, lazy people, who will never hold a job if things are given away for free. We have no stats on this phenomenon although it is a frequent complaint of Republicans and the wealthy, especially Mitt Romney, who has received 13m in campaign contributions from the NRA.
3. It’s socialism, and socialism is ruining the French economy says one responder.
4. Just no, is the general tendency of most answers. Anecdotes abound, but anecdotes are not statistics.
5. We can’t help those who live in poverty traps because they have already ruined their lives with drugs, crimes, or alcohol.
6. Let black and brown people go in the military. (Not exactly likely to produce a future equal to a good college education.)
The question asked on social media is:
Do you believe student debt should be cancelled?
Here are some of the answers.
Nb If you want to dismantle the poverty traps in our inner cities you cannot fail to provide exit ramps for inner city kids. Educate them in new and creative ways, guarantee them free college or a free training program and stop airing your jealousy and assuming your personal story works for everyone. You sacrificed. Good for you. But your refusal to see that others may need a lift takes away from your positive story. 3likes
TT Nb Are there merit-based college stipends for those who learn hard at school and get good marks?
Nb TT Why not reward them also but I think the whole world wins if we end poverty traps.
SAR The military provides discipline, a current job and potential after work after leaving the service. Unfortunately, over 2/3 of age eligible individuals are prevented due to drug use, alcohol use and convictions. Just saying.
Nb Only the rich would think that $20,000 is a small debt.
RLI Nb #20k is the cost of an entry level car…minimum. If you live in an urban area with good mass transit, why do you need a car?
The little things add up also…UBER, Netflix, GrubHub, etc.
CA RLI You sir are in a bubble…..entry cars don’t start at 20k that’s ridiculous..I bet you are a person that would buy your 16-year-old a 20k car…and people wonder these kids are spoiled and morals and values in the world are crap. Oh and is it really necessary to put all the certs…like No one cares about your ego
RLI CA I was not born with a “silver spoon”. I paid for my first car…a used Saturn at $12k. I had it for 7 years. I saved and paid for it cash…no loan
Nb I was an assistant professor who taught College Reading and Study Skills to adults below the poverty line. If they took a loan and didn’t finish college, they had to work three jobs to pay it back. We gave then skills to prevent them from failure and many did go on to earn degrees, but loans must be repaid whether you find a good job right away or not. I speak from experience, and I have empathy.
LB Hmmm…the word “should” is what bothers me. I was a first-generation college student. Was able to acquire some scholarships but ended up with about 10k owed. I did not have high paying jobs from my degree, but I did pay it off within 10 years, as well as an emergency medical bill. Peers I know had better paying jobs and struggled to pay off their loans. They also spent money on frequent non-necessities like daily Starbucks and new vs used furniture, cars, etc. When I learn that most load debt is less than what I see actual peers of mine spending money on, I question if the widespread problem is rising education costs, or lack of financial management skills. I do feel frustration when I hear that others owe what I owed, complain about what they are paid which is higher than what my salaries have been and will potentially have their debt wiped clean. Is that just another “overlook the Gen X kids” scheme? Cry emoji
CA RLI but you said an entry car is 20k bud…do you not see what I’m pointing at? Why did you mention how long your struggle with the Saturn car. Drop the ego guy…..we are all in this together. Red heart emoji
CA LB reading your post reminds me of a progressive insurance ad..
LB CA I don’t know if that is a complement or a slam, but okay! Thumbs up emoji
Nb I would never talk anyone out of going to college if they wanted to go. I think college offers cognitive rewards that no one can take away from you. Our colleges are expensive, often too expensive but good teachers deserve good pay. Subsidies for students to help offset high costs or to make community colleges free makes sense. Training programs are fine but pushing poorer students away from college should not be tolerated.
ME Fix the Problem!
Make Higher Education Affordable
Not Just for the Wealthy.
Reasonable Debt fosters Commitment and Dedication. Ridiculous Debt leads to frustration and Failure. 2 likes
GM Cancel all student’s debt.
TT GM Exactly and stop issuing student loans so the problems don’t reoccur.
AV It is not that simple…On the one hand it would lighten the student’s heart and their parents. On the other hand how professors and staff would get paid if the institution were to cancel this debt? I know the system is not perfect, but I prefer a million times the American system than the French one that gives free college education. Free college and then NO JOBS. Not ideal at all.
RS I’m not following why the free education is the problem in this scenario. 3 likes
AV If you had been living in France half of your life you would know why. In a few words I am going to try to explain to you RS. Somewhat the French system (economy, businesses, and health care) has been failing for decades, at least since the beginning of the 80’s. The French has had a lot of leaders who were socialists. It seems to work in Scandinavia and the Netherlands but not all is golden there either…”if you give a mouse a cookie” is a famous children’s book here in America. In other words, if you give people stuff, they are going to stay on their couch instead of going to work and doing their part and they are going to be more demanding while doing less. The French government gives FREE TUITION but business owners are scared to death to hire anybody. That led to the brain drain (in French “la fuite des cerveaux) and to a decaying economy. Voila =there you go! Aren’t you happy to be an American? I know I am.!
RS AV That doesn’t seem to match up with real life examples though, or studies around that subject. While I’m not American myself, to use examples from Nixon’s own UBI study showed no meaningful reductions in people working when they received it, nor did the introduction of social security or similar welfare programs.
AV RS ?
RS AV Could you elaborate?
AV RS You would have to have lived half of your life in France to get it.
RS AV I live in a country with free education (plus free healthcare, unemployment benefits, and a state pension) which has never been causally linked to any economic problems we’ve faced. I need something more than an anecdote to back up the claim that people getting free stuff makes them less productive workers. 3 likes
AV RS India?
RS AV What about it?
AV RS Is it India? When one has an MBA for example, one can learn a lot about the pluses and the minuses of one country’s strong suits and weaknesses. Why do you think the US is the strongest world’s economy? It is not giving away free college tuitions…just saying.
RLI I am not a rich man. I am not a poor man either. I worked, saved, and paid for my degree costs. Same by my certs. To do this takes sacrifice. By not buying a Starbucks drink every week, and average of $3.25 per drink, one saves $813 a year. By not using UberEATS or GrubHub…figure $13-$14 once a day for lunch during the work week, one saves about $3250 a year. Same can be said for getting rid of cable TV, Netflix, Hulu, or other streaming. The savings can be applied towards the debt… including university debt. As for food, if one has a supermarket nearby, a stove, and utensils, they can probably make a wonderful meal for half of UberEATS price. For entertainment, you have wonderful parks and even free museums to go see. You can have TV without cable or Netflix. The reason I highlight this is because this is what it takes to pay off a debt. That’s how I pay off my debt. I am not screaming for a cancellation of university debt. I actually believe that not having skin in the game makes you not value something…behavioral economics. If a degree was free, it would lack any value. 25 likes, loves and applause emojis. 8 responses
AM Definitely have to forgo the luxuries to be serious about repaying debt. No avocado toast. Using the overdrive for library books and audiobooks is another way to save. Recycling cans and bottles, selling online, shopping secondhand. It all helps.
RLI AM don’t know if it is sarcasm or not. I grew up eating avocado…just not on toast…I learned to make guacamole. Avocado actually has good fats when eaten in moderation. My wife, from Vietnam like avocado ‘sinh to’. Just need to learn budgeting and money management.
CW-M I agree with SOME of your perspectives; however, the degree still lacks value when a company won’t pay your worth for obtaining the degree. This is what I mean when I say I have not received MY ROI. 2 likes
DS Yes, Sir. This. Nobody is talking about this.
DM “If a degree was free, it would be lacking any value”. Wrong. Wrong. Wrong. Consider the college experience involving hard work, learning, acquisition of skills, etc. That is value. Maybe Trump can buy a degree, but regular students earn it.
SN DM yes a degree has value, that is why you pay for it!!!!!!!!!!!!
KW Yep. Same here. Paid off graduate school debts choosing not to vacation, not to have cable, not to dine out, not to buy new clothes, furnishings my apartment with stuff other people don’t want, etc.
KW CW-H if one takes a path of study that has little value to employers then the consequences of that decision are yours and yours alone.
LG Doesn’t work for everyone when you have a huge overhead. I have many family and friends that are going far and beyond to help their families.
SM I would not agree to any loan forgiveness until we fix the source of the problem. That is just kicking the can down the road. When I was young and going off to college I had very poor counseling. Then because of the college’s ridiculous requirements and lack of room in courses I wanted and needed I had to take classes that were worthless in my future career and of such disinterest and inconvenience to me that I did very poorly in those classes. To keep my student loans and stay enrolled while I waited for relevant classes, I had to take a full load of irrelevant courses and incur unnecessary debt. I’ve got kids going off to college soon. I will not let then attend a school where this *** happens. Is this still a universal problem? This is where trade schools are undervalued…many careers don’t have educational paths with the hyper focus like the trades and students waste valuable time and money taking “filler classes” which primarily benefits the institution. 4 likes 3 replies
TT SM Exactly, nobody should be forced to take loans for anything. Looks like an illegal action. Are the student loans legal at all? Does not look like, judging by the rebellion on paying back. Delegalize the student loans would clean up the legal situation.
LC Hypothetically, if you “cancel” student loans when does it stop? I think efforts would be better spent to give incentives to colleges and universities to reduce the cost and make post-secondary education more affordable. Also, it would be wise to put a cap on how much can be borrowed by students beyond what it cost to pay tuition, fees, and books and supplies. Some students take out much more than they need. We have triplets who are now 25 years old. They all graduated with honors from their universities, and one is about to complete a master’s degree. They all attended junior college and earned scholarships to help them keep the costs down. They have varying amounts of debt now, but they expect to pay it off themselves, not have it disappear. We were unable to help them financially because I developed spinal cord damage due to a rare disease starting when they were in eighth grade. I evaluated students with suspected disabilities and my husband still teaches and coaches. This is his 31 st year to do so. Otherwise, we would have done more as parents to help them financially but it was not possible. That situation nearly made us declare bankruptcy and we are still struggling because of it. 5 likes 5 replies
PP The cost and tuition is simply too expensive and let’s not forget in the past folks with less income and certain race could not even afford school or attend unless it was a sport scholarship. So, it should not be a cap. 1 like
What students said that Forbes didn’t.
Many students suggested that if the government chose to subsidize colleges so that colleges could lower tuition and other costs then those who had already paid off their school loans would not be as bothered as they would be by having the government cancel individual student loans. Can colleges be trusted to take the money and use it as intended?
What are your thoughts on the matter of cancellation of student debts?
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