[CoryG89]

Then you are not the target for student loan forgiveness. It is meant for those who took a loan on the premise that they would be able to get a job that allowed them to pay back the loan. This is not the case for a large portion of college graduates. Here on HN this is not going to be common due to the demand in our job market. But talk to someone who borrowed a bunch of money to major in something with a less demanding job market and you'll hear a different story.

[theli0nheart]

While this situation sucks, how is it any different than buying a house with a loan, having the house lose half its value, and then having the mortgage be written-off by the bank? Many adults went through this in 2008-2009 but short of filing for bankruptcy, I don't think billions of dollars of loans were forgiven because people couldn't pay them. They had to give up their houses, which would be the equivalent here of giving up your education.

Basically, if loans don't need to be paid back, what's the point of a loan at all?

[CoryG89]

If you were mislead by the bank about the value (or future value) of the house, then perhaps that loan should be (at least partially) forgiven as well.

It is also the responsibility of the party giving a loan to ensure that the borrower will have the ability to reasonably repay the loan in the future.

[theli0nheart]

> If you were mislead by the bank about the value (or future value) of the house, then perhaps that loan should be (at least partially) forgiven as well.

During the housing crisis, banks enabled home buyers by providing low interest rates, insanely low income requirements, and small down payments. As a free person with their own free will, it should be your responsibility to decide if an investment is worthwhile, not a no-name bank which most definitely does not have your best interests at heart.

> It is also the responsibility of the party giving a loan to ensure that the borrower will have the ability to reasonably repay the loan in the future.

While it's obviously their goal to ensure that the borrower will be able to repay the loan (why else would they have people jump through so many hoops to get one?), it's by no means their responsibility. The only responsible party here (i.e., the party you can count on) is yourself. Your bank isn't going to find you a job, or put together your resume for you, just so you can repay your loan.

[coldpie]

I want to live in your world of perfectly rational and infinitely wise superhumans. Sadly we live in the real world, and people are under-educated about debt, mislead by marketers, preyed upon by salespeople, and left holding the baggage. Adding and enforcing regulations about how debt can be issued, and helping people who have been victimized, seems like a practical resolution to the problem, rather than the one based on wishful thinking that you propose.

[theli0nheart]

I think we're both describing the real world. People can simultaneously be held responsible for their debts and be under-educated about debt, mislead by marketers, etc. The question is who pays when a borrower makes a mistake—the lender or the borrower.

If you label all borrowers who can't pay back their loans as "victims", wouldn't that make the practice of lending itself immoral? In your opinion, why not just outlaw lending completely and be done with it? That way no one can be taken advantage of.

[coldpie]

I have a hard time foisting the responsibility for all $108 billion onto the borrowers. There's something more at play here than personal irresponsibility.

[CoryG89]

> If you label all borrowers who can't pay back their loans as "victims", wouldn't that make the practice of lending itself immoral?

No. It is only immoral to knowingly lend to someone who can't and won't be able to repay the loan.

[thepompano]

> The only responsible party here (i.e., the party you can count on) is yourself.

Agreed, but to that point, I'd imagine that the primary consumers of student loans are people in their late-teens who are on-the-whole less financially responsible than homeowners. And for a lot of those people, they're under a lot of social pressure to go to college despite the fact that it's a gamble that might not pay off.

[theli0nheart]

Completely agree. This is a problem of education, upbringing, and society. If we really wanted to solve this problem, we'd address the root issue, and adolescents would understand that college isn't required or expected to be a functioning and productive member of society.

[hash-set]

But that is unfair to those of us who do understand debt. This is the problem with socialism right here--you can't cripple the people who are responsible, who do the right things. You kill the country that way.

[CoryG89]

You feel cheated that you understand debt enough not to be taken advantage of? Seems like a silly thing to be upset about.

Perhaps we also shouldn't rescue someone who falls into an open man-hole, because it isn't fair to those of us who know to watch where we're walking?

[kogus]

The issue is that "not understanding well enough.." is the fault of the fool, not the crook. Crooks will always exist.

Fools should be responsible for the consequences of foolish behavior.

[nradov]

Banks didn't generally make any promises about the future values of houses.

[adrianN]

The difference is that you can't clear student loans by going bankrupt AFAIK.

[theli0nheart]

While that's completely true, my point stands. If loans don't need to be repaid, what's the point? Why just give up the ruse and make college free for everyone? I'm not proposing this at all, I'm just saying this is a slippery slope and the difference between the two is minimal.

[ant6n]

Going bankrupt doesn't have zero costs associated with it.

[theli0nheart]

The linked article in this post doesn't mention anything about the borrowers needing to file bankruptcy.

[yummyfajitas]

Yes, the target for student loan forgiveness is irresponsible people. I think that's the point.

[kbart]

It's not fair and responsible (from a government point of view) to burden teens with decision that might lead to a debt for the big part of their life imho.

[Jach]

So, where are the parents at?

I would bet it's a small minority of students who actually did seriously consult their parents and whose parents did wisely caution against it (even refusing to sign a parent PLUS loan, a factor not talked about much) but who found a private lender themselves anyway and after graduating can't pay it back. You could protect this minority from itself by raising the age of adulthood, but if we actually agree it's a minority, this won't solve the problem.

My point is it's not good enough to blame stupid non-adult teens when you could blame their adult parents just as easily, and trying to solve the problem at either of those levels (less stupid teens through 'education', or less stupid adults with longer reaching power, or forbidding teens in general from making bad choices) won't work.

[CoryG89]

The sad truth is that some kids don't have parents. The fact that they need to take out a loan at all suggests that their parents (if they have any) may not be very experienced at making much money themselves.

Loan forgiveness should not be restricted to teens. I know many adults that could be similarly mislead.

And absolutely it is a minority, which is why student loan forgiveness is workable. Trust me, the banks will still make money, just not as much.

[Jach]

Ok, so where are the teachers at? Surely they're in even better positions to advise than the average parent. https://news.ycombinator.com/item?id=13070885 report suggests otherwise.

Some loan forgiveness is workable and I think inevitable but it does nothing to stop the problem, it just relieves some people at the expense of others (generalizing to the whole economy) who can take the hit. In that it's kind of a herring. When you find yourself in a hole, you should stop digging as the first thing you do. Loan forgiveness lifts some people out of the hole but incentivizes digging faster.

[CoryG89]

As some others have said, it all depends on how the debt is forgiven. If the government uses tax payer money to repay the loans, then you are correct. If the government makes universities and/or loan providers eat the cost in cases where it can be shown that they should have known the debt would not be able to be repaid, then the loan providers will not have an incentive to give out as many loans as possible to people who will be unable to repay them.

The party in the best position to know who will and won't be able to repay a particular loan is the lender, who has all the historical data and statistics about previous loans.

[nradov]

Stop making excuses for adults to engage in infantile behavior. I was perfectly capable of making life decisions at age 18 - 19. And I am not a special genius.

[evilDagmar]

Unfortunately, it's not the target. The target is, as has been stated multiple times, people who are incredibly, irretrievably indebted with no hope of paying the money back, because the colleges with the relevant programs cost far more than someone who obtained the resulting job (or wasn't able to find one) can ever afford to pay back.

Being that student loans in the US are _no longer forgivable_ via bankruptcy or any other means, these student loans are essentially a permanent debt the student will never be free of otherwise, and bear more than a passing resemblance to a class of indentured servitude. Such things are not what any reasonable person had in mind for America.

[yummyfajitas]

Taking out a loan you don't realistically have the capacity to pay back is irresponsible. This scheme is nothing but privatized success and socializing failure.

If you want to fix the problem, stop subsidizing the loans and allow these colleges to die, shrink or reduce costs.

[CoryG89]

> Taking out a loan you don't realistically have the capacity to pay back is irresponsible.

The loan provider is in a much better position to know who will and will not be able to pay back a particular loan.

> If you want to fix the problem, stop subsidizing the loans and allow these colleges to die, shrink or reduce costs.

Perhaps this is better, but seems unrealistic.

[yummyfajitas]

The loan provider is in a much better position to know who will and will not be able to pay back a particular loan.

They have no reason to care since the government backs the loans.

[thompo]

what do you mean, irresponsible? how do you know these people aren't working their asses off in a responsible manner to try to pay off their debt?

[dangerlibrary]

I won't copy my entire comment, but right here I lay out the math on why student loan forgiveness goes largely to those getting very expensive terminal professional degrees. Do you consider those going into medical school to be irresponsible people?

https://news.ycombinator.com/item?id=13070754

[yummyfajitas]

That's interesting. No, I guess that those folks (who do have the ability to pay back their loans) aren't irresponsible.

They are just being subsidized at the expense of folks who are (over a lifetime) much poorer than they are.

[CoryG89]

Yes, or perhaps just people who were mislead by universities and/or student loan providers.

[pc86]

If you were misled by a loan provider, that's fraud and you should report it. The much more likely scenario is that you assumed a $150k degree guaranteed you a job, which is obviously not the case.

[reader5000]

How is taking money for a degree irresponsible? The only party irresponsible is the lender. I hope the taxpayer loses 60 gajillion dollars on student loans since they are simply exploiting young people.

[erelde]

What's irresponsible? Getting a master in Art History?

You seem very close minded. Everyone can't and shouldn't do a CS degree to "get a job".

[lgieron]

A decision to start your adult life with borrowing large amount of money and spending it on studying an esoteric subject would be considered extremely irresponsible in most societies ( assuming the person does not have any assets or marketable skills to fall back on).

[ant6n]

By 'most societies' you probably mean undeveloped countries.

This problem doesn't really exist in other first world countries.

[yummyfajitas]

If you enjoy art history, I have no problem whatsoever if you want to learn about it. But if you borrow $50k that you can't pay back to pay for your hobbies, that's irresponsible.

[CoryG89]

The problem is a university and/or loan provider who is only interested in your money (and doesn't fear their loans being forgiven) has an incentive to mislead kids into thinking that this is not irresponsible.

Not everyone is as well informed as you were at 18.

[stinkytaco]

The article touches on this, but income based repayment benefits students who graduate with medical, law or other professional degrees the most. Entering into the workforce at a relatively low rate, then having some loans forgiven before their pay goes up a great deal.

[cmdrfred]

I had no opportunity to attend college, I had to support myself at 18. Is it right that I subsidize people more privileged than I? If and when they start making money can I expect a discount on their services?

[thepompano]

> Is it right that I subsidize people more privileged than I?

Probably not, but considering that the forgiveness program the government is talking about mainly targets people with debt who can't pay it back - like people who are seriously disabled and can't get a job - you would likely be subsidizing people less privileged than you, which is a good thing.

> If and when they start making money can I expect a discount on their services?

No, but they're not making money now and they won't be in the future and that is why the government is considering discharging their loan debt.

[cmdrfred]

>mainly targets people with debt who can't pay it back - like people who are seriously disabled and can't get a job - you would likely be subsidizing people less privileged than you, which is a good thing.

So if I become disabled, will you be paying my mortgage?

[thepompano]

I'm not sure if I'd be paying your mortgage per se, but I'd be paying for whatever benefits you receive through the Social Security Adminstration's Disability Benefits program. But even if I was, why would that be controversial? Why should the government not provide aid to people who are virtually derelict?

[cmdrfred]

Don't college educated people also receive social security benefits? Why should they receive more benefits over someone who isn't college educated?

[thepompano]

I would think that the program is meant to extend help to people who pursued a college-education, took out $30k worth of loans, worked hard, and became disabled or otherwise unable to procure employment post-hoc. For example, people who pursued computer science degrees and then got into car accidents and incurred traumatic brain injury (use your imagination).

I take your position to be that 1. you're in favor of providing financial support to people on disability, but 2. concerned that college-educated people on disability potentially stand to qualify for more benefits than non-college-educated people on disability.

If this program's stated intent was to fully subsidize education for people who would definitely not be able to procure work in their academic area of focus (like subsidizing music degrees for deaf people or whatever), I would concede that the program would be economically counter-productive. Otherwise I think the government should extend more financial assistance to people who are at greater risk of ruin.

[CoryG89]

If you become disabled, then you do get the opportunity to receive subsidized help in the form of disability.

[saint_fiasco]

Yes and yes. The fact that they are offering the service at all means you don't have to go somewhere else (possibly far away) to get an equivalent service, so that is a form of discount.

The exception is for fields that are zero-sum games, such that an abundance of lawyers, for example, makes it cheaper to defend yourself from a lawsuit but also more likely to be sued.

[cmdrfred]

> Yes and yes. The fact that they are offering the service at all means you don't have to go somewhere else (possibly far away) to get an equivalent service, so that is a form of discount.

No thanks, if I'm paying for your education I expect a better discount than "my office is a little bit closer"

Op is right, this is unadulterated bullshit.

[saint_fiasco]

It should not be controversial that with a greater supply of a service, price will tend to go down (or quality will go up) because there will be more competition.

[cmdrfred]

>It should not be controversial that with a greater supply of a service, price will tend to go down (or quality will go up) because there will be more competition.

Firstly, if the services are in demand why is paying off the loan an issue?

Secondly, they already have the degree paying off loans does not increase the number of graduates.

[saint_fiasco]

> Firstly, if the services are in demand why is paying off the loan an issue?

That is a very good point.

> Secondly, they already have the degree paying off loans does not increase the number of graduates.

It depends on how the debt is forgiven. If government just pays the colleges then it will suck, but suppose they were like "You sold a defective product to millions of people and we are not paying for it. Deal with it". Then colleges will learn to stop offering useless majors and the number of graduates in bullshit will reduce while the number of graduates in useful stuff will increase.