Sen Elizabeth Warren introduces bill to eliminate college loan debt

DzynKingRTR

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I'd be interested to know if the music degree they have is a general music degree/much like a general studies degree or more specialized and was the degree required for the job? Either way, this is something that would have to be addressed with any type of reform in governmental educational loans. The "line" would have to be drawn somewhere and there would be those who would not qualify, even though someone could point to several examples and say "You see, that person found a job." Someone mentioned interior designing. Which is another one of those jobs that even though we could find examples of people who found gainful employment in that field, is the rate of "employability" (I don't even know if that's a word) of someone with an interior design degree/certification stable enough to justify a government backed loan?
There are interior design firms out there. Why on Earth some of you think that is not a "real" degree is just ignorant. I think you might be confusing interior design with interior decorator. These are 2 entirely different things.
 

RollTide_HTTR

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Being a teacher is a very "employable" field. But loaning someone $50,000-$100,000 for a general "music degree" (extraordinarily broad) would be a no go. Had a neighbor years ago whose daughter majored in "Music" and ended up working at a "Sound Gallery" that sold audio equipment. The degree was worthless on the open market from the get go. Yet she was strapped with student loans out the wazzoo, with mama and daddy having to help.
Right my point wasn't really about teachers specifically and more about possible unintended consequences. When you start excluding specific majors its bound to happen.

There could also be majors where you aren't necessarily employed in an industry related to that major but the skills and knowledge acquired in your studies are still incredible valuable and useful when it comes to critical thinking and problem solving. For example philosophy or psychology.


I am all for having fewer Musical Theater majors for example but I think you have to be really careful about which metric you use when deciding what majors are worth offering loans for and which aren't.

It just seems like a slippery slope
 

Bamabuzzard

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some of them had general music and went on to graduate school. they mostly ended up in education, working for orchestras (as musicians or staff)

i think a lot needs to be done to reform the student loan business, but i don't think it should involve only loaning for certain degrees. * most of the folks i went to school with changed majors a few times and then ended up working in different fields.

**i'm not sure why people keep ragging on interior design. it is a valid career path.
*This is another thing that would have to be ironed out. Someone who begins down one educational path then changes directions. The approved loan was based on the original educational path. Not the second. How is the funding handled if the educational path being switched to doesn't fall under the approved guidelines?

**I don't think anyone (or I'm not) is looking down on interior decorator as a respectable career choice. But rather the demand in the job market for that service. I don't think the government/taxpayer's money should simply loan money to someone based on their dream. Not saying you are saying or implying that. But the reality of it is, there are some careers that though are respectable. The demand in the open market is minimal and for every person who finds a good paying job as an interior designer. There's an even larger number who cannot find gainful employment in the field.
 
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TIDE-HSV

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*This is another thing that would have to be ironed out. Someone who begins down one educational path then changes directions. The approved loan was based on the original educational path. Not the second. How is the funding handled if the educational path being switched to doesn't fall under the approved guidelines?

**I don't think anyone (or I'm not) is looking down on interior designing as a respectable career choice. But rather the demand in the job market for that service. I don't think the government/taxpayer's money should simply loan money to someone based on their dream. Not saying you are saying or implying that. But the reality of it is, there are some careers that though are respectable. The demand in the open market is minimal and for every person who finds a good paying job as an interior designer. There's an even larger number who cannot find gainful employment in the field.
For that matter, there's not much demand for grads with degrees in either philosophy or English. Should those be non-funded dreams also. Society would be poorer without them...
 

Bamabuzzard

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I big one for me would you have to have a major. No one should be allowed to waste the college's time with general studies.
If we're concerned at all about the ability of the borrower to pay the loan back (regardless if there's interest or not). There has to be a discussion about the degree the borrower is pursuing and does it have the potential or realistic ROI to be able to payback the loan. If we're not concerned about that, then why even talk about reform? Unless we're just going pay for everyone's higher education and not even be concerned about a loan or paying anything back. Keep the system the way it is now.
 

DzynKingRTR

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If we're concerned at all about the ability of the borrower to pay the loan back (regardless if there's interest or not). There has to be a discussion about the degree the borrower is pursuing and does it have the potential or realistic ROI to be able to payback the loan. If we're not concerned about that, then why even talk about reform? Unless we're just going pay for everyone's higher education and not even be concerned about a loan or paying anything back. Keep the system the way it is now.

How do we determine what is a "real" major? You can get a bachelor's in just about anything and then enter a master's program in something completely different.
I work with someone that got a degree in psychology and then went and got her master's degree in architecture. She thought it would be easier to do it that way. It really wasn't, the Master's Architecture Program is not exactly easy.
 

Bamabuzzard

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How do we determine what is a "real" major? You can get a bachelor's in just about anything and then enter a master's program in something completely different.
I work with someone that got a degree in psychology and then went and got her master's degree in architecture. She thought it would be easier to do it that way. It really wasn't, the Master's Architecture Program is not exactly easy.
Good question and good luck getting more than three people to decide on the same criteria as to what constitutes a "real" major. If there ever is a true discussion on reform and laying out criteria for government funded loans for higher education. Then seeking a solution where everyone gets what they want has to be off the table or nothing will ever get accomplished. The line would have to be drawn somewhere. Earle brings up a good point. Those who pursue degrees in philosophy and English, would we give them an exemption? Though the job market for these type degrees aren't in high demand. Do they get left out in the cold? You could say the same thing for the arts and as we've discussed earlier, music. It's why discussion needs to be had. Broad ideas always sound good from 50,000 foot high. The details is where it gets messy.
 

4Q Basket Case

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The competing issue is that the sheer number of people in problematic student loan situations has become a drag on the economy--millennials are having to spend so much of their income on their student loan debt that they cannot do the usual things that keep the economy going, such as buying property, and all that fun stuff.

I get the reluctance some may have at the idea of loan forgiveness, but some sort of relief helps the economy, not just individuals. And frankly, I'm gratified/delighted that there have been a lot of different ideas floated in this thread.
I'm sorry, jt. I have to respectfully disagree.

If we forgive student debt because we want to allow the debtors to find other uses for the cash that currently goes to student loan debt service, we'd forgive credit card debt as well. Actually, we'd forgive any debt that financed something that is no longer of any value. After all, if nobody had to make debt service on credit cards, or on a car or house that was no longer worth what was borrowed, they could use the freed up cash to buy stuff to keep the economy humming.

Regarding reduction or forgiveness of interest, so long as the US Government is the lender, I'm kind of ambivalent about it. It just doesn't help all that much. If I have $50K in student debt, and am paying at 5% or 7% -- let's call it 6% for purposes of this example -- over 120 easy monthly payments, that's $555 a month. If we cut the interest rate in half, the payment is reduced only to $483 -- almost 90% of the originally-contracted amount. Even if we reduce the interest rate to 0%, the payment is still $417, or about 75% of the original contract.

(BTW -- I'll digress for a tangential note. For anybody who thinks that a 6-7% interest rate on student debt is outrageous, try this: Go to a bank and ask for a 10-year unsecured installment loan to pay for something that is both intangible and has no value to anybody other than the prospective borrower. And that assumes that it does in fact have ongoing value to the borrower. Tell the bank that you have no income or job, but will in a few years. If you can get the loan at all, it's going to be a lot more expensive than that. The comparison to a first mortgage loan financing an owner-occupied residence is not even apples to oranges. It's apples to car tires.)

Back to the original topic of forgiving student loans: Not all student loans are made by the government. Some are made by banks or other lenders, guaranteed by the government. Others are made by banks and other lenders with no governmental backing of any kind. Should those be forgiven?

Think carefully before you answer. If you think they should, you just cost a lot of people a lot of money. Either the taxpayers paying off the banks (in which case we're back to why it's a taxpayer issue), or the banks themselves. If your reaction is that the suits deserve it, you need to re-think. The suits that so many people love to hate won't be affected at all....the shareholders will. And if you think you don't have any skin in that game, you probably need to take a look at what your 401k, IRA and pension fund are invested in. It is close to certain that there are lots of bank stocks in those portfolios. If you or your pension fund have an S&P 500 or Russell 2000 Index fund, it goes from close to certain to a 100% lock.

And we don't even touch on the effect on credit going forward. As in, if a bank can have assets or earnings wiped out by the stroke of a governmental pen, why should they ever lend a dime to anybody again? For that matter, what would we be saying about the enforceability of contracts, the very foundation of any capitalistic economy? And what would separate us from third world countries that nationalize industries?

This is an idea that has lots of populist appeal. But the slope is incredibly slippery, the unintended consequences are countless, and while I'm sorry for anybody who has a failed investment (believe me, I have my own list of those), I still don't see where the problem belongs to anybody but the borrower.
 
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RollTide_HTTR

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IMO any big shift in handling of higher ed probably needs to happen in conjunction with broader education reform IMO.
 

DzynKingRTR

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Good question and good luck getting more than three people to decide on the same criteria as to what constitutes a "real" major. If there ever is a true discussion on reform and laying out criteria for government funded loans for higher education. Then seeking a solution where everyone gets what they want has to be off the table or nothing will ever get accomplished. The line would have to be drawn somewhere. Earle brings up a good point. Those who pursue degrees in philosophy and English, would we give them an exemption? Though the job market for these type degrees aren't in high demand. Do they get left out in the cold? You could say the same thing for the arts and as we've discussed earlier, music. It's why discussion needs to be had. Broad ideas always sound good from 50,000 foot high. The details is where it gets messy.
2008-2012, the architecture, construction, engineering wasn't in high demand. Although professors at my alma mater were lying to students in architecture and telling them everything was awesome then I said stuff and a bunch dropped out.

If we only use "high demand" as a criteria, this rules out everything but doctor and lawyers.
 

Bamabuzzard

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2008-2012, the architecture, construction, engineering wasn't in high demand. Although professors at my alma mater were lying to students in architecture and telling them everything was awesome then I said stuff and a bunch dropped out.

If we only use "high demand" as a criteria, this rules out everything but doctor and lawyers.
Then what criteria do you suggest using, if any?
 
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DzynKingRTR

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Then what criteria do you suggest using, if any?
First you must have a clearly defined major. No general studies.
No Business majors allowed unless you have a job lined up. Companies hire high schoolers all the time as interns. I know 3 people with "Business" degrees and they have had a dozen jobs combined and cannot figure out why they are not a CEO yet.
If you want to get a degree in math, english, biology, etc. you better be an education major too. You are going to be a teacher.
If it does not have an actual job associated with it then it does not merit funding. An example would be Gender Studies.
Most majors that are just research shouldn't count at all. If I can read a few books and gain enough knowledge to talk to you about your "major" it doesn't count.
Every university needs to do away with the BS classes. They are just filler and not needed in any way. Did I really need to take 2 Literature classes? Did I really need 3 science classes? Did I really need to take a class called STS (Science technology and Society)? All of these were just ways to get more money.

I probably could have only done 3 years of college and then worked for architects and been just as knowledgeable as I am right now.
 
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TIDE-HSV

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I'm sorry, jt. I have to respectfully disagree.

If we forgive student debt because we want to allow the debtors to find other uses for the cash that currently goes to student loan debt service, we'd forgive credit card debt as well. Actually, we'd forgive any debt that financed something that is no longer of any value. After all, if nobody had to make debt service on credit cards, or on a car or house that was no longer worth what was borrowed, they could use the freed up cash to buy stuff to keep the economy humming.

Regarding reduction or forgiveness of interest, so long as the US Government is the lender, I'm kind of ambivalent about it. It just doesn't help all that much. If I have $50K in student debt, and am paying at 5% or 7% -- let's call it 6% for purposes of this example -- over 120 easy monthly payments, that's $555 a month. If we cut the interest rate in half, the payment is reduced only to $483 -- almost 90% of the originally-contracted amount. Even if we reduce the interest rate to 0%, the payment is still $417, or about 75% of the original contract.

(BTW -- I'll digress for a tangential note. For anybody who thinks that a 6-7% interest rate on student debt is outrageous, try this: Go to a bank and ask for a 10-year unsecured installment loan to pay for something that is both intangible and has no value to anybody other than the prospective borrower. And that assumes that it does in fact have ongoing value to the borrower. Tell the bank that you have no income or job, but will in a few years. If you can get the loan at all, it's going to be a lot more expensive than that. The comparison to a first mortgage loan financing an owner-occupied residence is not even apples to oranges. It's apples to car tires.)

Back to the original topic of forgiving student loans: Not all student loans are made by the government. Some are made by banks or other lenders, guaranteed by the government. Others are made by banks and other lenders with no governmental backing of any kind. Should those be forgiven?

Think carefully before you answer. If you think they should, you just cost a lot of people a lot of money. Either the taxpayers paying off the banks (in which case we're back to why it's a taxpayer issue), or the banks themselves. If your reaction is that the suits deserve it, you need to re-think. The suits that so many people love to hate won't be affected at all....the shareholders will. And if you think you don't have any skin in that game, you probably need to take a look at what your 401k, IRA and pension fund are invested in. It is close to certain that there are lots of bank stocks in those portfolios. If you or your pension fund have an S&P 500 or Russell 2000 Index fund, it goes from close to certain to a 100% lock.

And we don't even touch on the effect on credit going forward. As in, if a bank can have assets or earnings wiped out by the stroke of a governmental pen, why should they ever lend a dime to anybody again? For that matter, what would we be saying about the enforceability of contracts, the very foundation of any capitalistic economy? And what would separate us from third world countries that nationalize industries?

This is an idea that has lots of populist appeal. But the slope is incredibly slippery, the unintended consequences are countless, and while I'm sorry for anybody who has a failed investment (believe me, I have my own list of those), I still don't see where the problem belongs to anybody but the borrower.
You forgot one important factor on student loans - a borrower can't bankrupt out of them. That's true of every other type loan you named. Also, we're ignoring the factor behind the ballooning loans, the obscene escalation of college costs. As I've said over and over, this country needs to be investing in vocational education, anyway...
 

RollTide_HTTR

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As I've said over and over, this country needs to be investing in vocational education, anyway...
Personally, I really enjoy the idea that we are all going to have to turn into Farmers eventually.

Automated jobs + push for locally sourced foods and sustainable farming methods(both of which require more laborers than we currently have) = we should all just be farmers again.
 

Bamabuzzard

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is this based on actual employment data?
Nope. But those charged with making criteria for degree/careers approved for government loans will definitely need this information in hand if presence in the job market is one of the criteria. I probably should have used a more extreme example, like underwater basket weaving. But whether it's interior design/decorating or whatever. If we're going to limit government student loans to other than what's available now. There's more than likely going to be degrees students have become accustomed to being able to borrow money for, no longer being eligible for those funds. Which degrees may end up on the chopping block is definitely a good discussion.

I don't believe someone shouldn't have student loans available to them for anything they want to pursue. If they can find a source (private loan company) willing to lend them the money at terms the student is willing to agree to. Then by all means, go for it. But when it comes to government money/taxpayer dollars being used, I think there needs to be a lot more scrutiny applied. The ability to payback the loan with the skills and/or degree earned from the loan definitely should be taken into consideration. Should it be the be all end all? I don't know. But it definitely needs to be a part of the discussion.
 

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