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Member Since: Sat May 17, 2008
In Reply To
Late Great Donald Blake 

Member Since: Sat May 17, 2008
Posts: 7,566
Subj: Re: So how do we feel about Biden's student debt forgiveness?
Posted: Fri Aug 26, 2022 at 02:36:40 pm EDT (Viewed 171 times)
Reply Subj: Re: So how do we feel about Biden's student debt forgiveness?
Posted: Fri Aug 26, 2022 at 08:25:47 am EDT (Viewed 167 times)

    And the idea that this will encourage the schools to raise their prices misunderstands the economic levers in place. The schools are already off the hook in the vast vast vast majority of cases. Whether the fed gov collects all the debt, forgives it, or sits on it, doesn't affect their balance sheet. And what determines their prices isn't generally speaking whether the government will forgive thee debt once the government owns it; it's whether or not the government will continue to guarantee those loans no matter how high prices rise or onerous the interest rates. This was a fantastically crooked and foolish way to finance public education in the first place, and it was essentially designed by and for banks and lenders.

This dramatically simplifies the scenario and doesn't differentiate between state colleges (that already get large government subsidies) and private non-profits (that get smaller government subsidies), and for-profit schools, this last one being by far the most predatory. All of these types of schools price differently. Also, how much in loans the government is willing to take on is impacted by how much it forgives as the government has finite resources and you can't act as if one doesn't affect the other.

    P.S. yes of the dozens of beneficial things that Biden could do but hasn't, this and Afghanistan are the two that I didn't predict correctly. I'm okay with that average lol To be fair though, I also said IF he did this it would be a half loaf, and low and behold.

Well, even before this, Biden had stopped interest from accruing on loans and deferred having to pay back the principle on loans during the entire time he's been in office. That's already huge for those people who have loans.

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