[31098347]

People who have paid their student loan debt are in exactly the same situation they were after this forgiveness than they were before: that is, they have no student loan debt.

People in the US are not punished for being financially responsible. They are rewarded for taking risks, but not punished for being responsible. Very different.

[loeg]

> People who have paid their student loan debt are in exactly the same situation they were after this forgiveness than they were before: that is, they have no student loan debt.

You're missing the point, either deliberately or on accident.

(Prefacing this with: we should keep and honor the terms of the existing PSLF program that students relied on when taking on debt.) There's no particular reason people with current loan debt, but ineligible for PSLF, should get a wealth transfer from other taxpayers with similar income, net worth, and expenses -- but no current student loan debt.

> People in the US are not punished for being financially responsible. They are rewarded for taking risks, but not punished for being responsible.

In fact, a hypothetical student debt forgiveness event like GP was discussing would punish those who responsibly paid off their student debts relative to similar-earning classmates who did not.

[31098347]

>In fact, a hypothetical student debt forgiveness event like GP was discussing would punish those who responsibly paid off their student debts relative to similar-earning classmates who did not.

Punish how? This word keeps being used but it does not fit any definition of punish I'm familiar with. I'm not being obtuse.

Some background of where I'm coming from: Worked 40+hrs/week for $7.25 to $10/hr from 2005 to 2009 to get a four year degree from a state school. Graduated with $35,000 in student loan debt myself and about $20,000 in debt through Parent Plus loans. My parents sent me some money for rent on occasion, but overall -- that's how I di it.

I also paid off all my student loans, and my parent plus loans.

If someone graduated with $100,000 debt because they partied all the time, didn't work, and tomorrow Biden just gave them a tax-free forgiveness....

I am not punished by this. At all. It has no impact on my life whatsoever. I made the best choice I could make with my circumstances, and I paid off my loans because at the time that was the best way to secure my future. The day before the party-guy got his $100k write-off and the day after, I wake up in the same house, with the same car, with the same job, with the same spouse. My life doesn't change at all.

[loeg]

> If someone graduated with $100,000 debt because they partied all the time, didn't work, and tomorrow Biden just gave them a tax-free forgiveness....

> I am not punished by this.

Imagine a fair and equitable spending program that distributed $100k to everyone. It's fair, and people with debt could use it to pay off their loans (you could even require it to be used to pay off student loans first). If your goal is to help people with loans pay off their debts, it is an effective program. It's also obviously fair.

Then, tax 100% of the distribution for people without student loan balances. This is the step that imposes a punitive expense, relative to a fair program, on people without student loans.

That's what these proposals look like. There's no particular reason recent college students as a group should be the sole recipients of a wealth transfer.

[omegaworks]

> Then, tax 100% of the distribution for people without student loan balances.

No one is proposing this.

[loeg]

Proposals to pay off student loan debt are the equivalent of this, as I have expanded on at length in the rest of my comment.

[omegaworks]

They are not, though. You wrote your comment as though every proposal is necessarily a tax on everyone that does not have student loans.

This is an entirely made up claim. A hypothetical strawman useful to only those that seek to victimize themselves when this topic comes up. Student debt is a contractual arrangement between the government and the borrower. It can simply be ended. The government has the power to do that without imposing a tax on everyone else.

[wonderbore]

> are in exactly the same situation

I don’t know you could possibly reach that conclusion.

I paid off my loan and lost 1000 hours of work.

You didn’t have to work 1000 hours to pay off your loan.

We’re not in exactly the same situation. I don’t know how else I can put this without ELI5’ing

[mrep]

Also adding 1.75 trillion dollars worth of debt which taxpayers who paid off their loans are now on the hook for.

[omegaworks]

The decision to put the debt of student loan borrowers on the shoulders of taxpayers is entirely political.

The government can simply write off the student debt, with no impact on taxpayers. It has the power to do so.

It may choose not to, because it may choose to make the people that invested in student-loan backed financial instruments whole using a tax.

This can also be accomplished without a tax.

[mrep]

> The government can simply write off the student debt

And now those people have 1.75 trillion dollars more to spend on the economy instead of paying debts which creates inflation which is effectively a tax on everyone with cash and bonds. There is no free lunch with the economy, just distortions.

[omegaworks]

If student spending inflates the economy to the point where there is significant impact on the dollar, what you are saying is we NEED this generation debt-burdened so the rest of us can live decently. If that is true we never really had a functional economy in the first place.

We need to grapple with that truth instead of perpetuating this suffering.

[mrep]

What is your definition of a functional economy? I'm a millennial with a mortgage and a car loan. Should I get free money so I'm not debt-burdened?

[happytoexplain]

The parent said:

"People who have paid their student loan debt are in exactly the same situation they were after this forgiveness than they were before"

Not:

"People who have paid their student loan debt are in exactly the same situation as those whose loans were forgiven"

You may have a valid point about why it's bad that the two people are in different situations (if you elaborate), but the parent did not say that the two people are in the same situation.

[fortran77]

More than that! They won’t have to pay income tax on that forgiven debt. You were taxed on the income you spent for college.

[greedo]

And you get tax breaks for tuition and college expenses...

[gr33nq]

Correct - both people in your scenario end up having no student loan debt.

But Person A, who paid their $30k loan in full, now has $30k less to spend on a home, a car, savings, etc. Person B, who did not pay their $30k, now has effectively $30k more in buying power either immediately or spread across what would otherwise have been their repayment timeline.

Person A's responsibility for their obligation has set them back $30k, while Person B's lack of responsibility for making payments has put them ahead $30k. Maybe we shouldn't call it a direct punishment, but they're certainly coming out of the scenario worse off than their counterpart.

[31098347]

>Maybe we shouldn't call it a direct punishment, but they're certainly coming out of the scenario worse off than their counterpart.

It's hard for me not to sound flippant when I say this, but -- this is life. As far as I'm concerned, anyone who has the means to pay off their student loans themselves practically won the lottery and they should be thankful they're not totally fucked like those who need the forgiveness.

There's an ugly, underlying impression I get from this discussion that is oddly reminiscent of the "welfare queen" stereotype.

[gr33nq]

>As far as I'm concerned, anyone who has the means to pay off their student loans themselves practically won the lottery and they should be thankful they're not totally fucked like those who need the forgiveness.

Let me share my personal experience with you so I can try to shed some light on our varying interpretations of what "won the lottery" means. I went to college full-time, four days a week, and was a commuter. I was responsible for my entire car payment, my parking pass, my books/material, and for taking out a loan for tuition. I took it upon myself to get a part-time job while continuing to study and go to class for four and a half years. I then got a full-time job upon graduating and lived very frugally for two years with a huge chunk of my paychecks going towards paying off my car and student loans. The thought of paying interest killed me, and I did everything in my power to put every penny I could afford towards paying down my debt. I didn't go on vacations, didn't spend money frivolously on a new iPhone every year, didn't buy anything that wasn't necessary until my obligations were fulfilled.

Now let's revisit Person B (and to be clear, I personally know a Person B who's a close friend of mine who fits this description). They did not consistently work in college, but partied, went to festivals, took vacations, had a much easier schedule not having to factor in a job. They then graduate just like me. They have a few hundred dollars more every month that can go towards more vacations than I had the option to take, a more expensive car that I could not afford to buy, and more discretionary spending power than I had during that time. They work a job now, but have yet to begin repaying their loans yet (I understand the pandemic was a once-in-a-lifetime situation, but even so, there's a grace period after graduating where you aren't forced to pay). And even when payments resume, they will likely pay the bare minimum each month because they now have the prospect of having that debt potentially forgiven in its entirety.

How do you tell me with a straight face that I won the lottery, and that Person B is actually the one who is "fucked" (as you so eloquently put it) and needs the forgiveness?

[Zpalmtree]

Why do you want to encourage people to make bad financial decisions

[31098347]

The massive information asymmetry involved in the student loan system means these kind of black and white judgements not particularly useful.

[renewiltord]

Well, that is a fair point. I think the US Government should give me 1 billion dollars. This actually is a Pareto-optimal action too, since I will then have 1 billion dollars and the rest of you will be no worse off. In fact, you will be exactly the same amount off as before.