Why Student-Loan Forgiveness Comes With Economic and Political Risks | WSJ 

Isn't college price inflation the problem? College hasn't always been super expensive

Y’all be screaming “ my body, my choice” well to that I say “ your loan, your payment”

Here are some ways to fix the system, some of which they already have started. 1) Remove all borrowers from default (this is going to happen). 2) Across the board changes to interest capitalization. Right now, they are talking about minimal changes. That's not good enough. Interest capitalization needs to be removed from student loans completely. In addition, all existing student loans should be reviewed for the amount that was originally taken out, the total amount paid so far, and the amount currently due. If the individual has paid back 1.5X what they took out, any remaining debt is completely cleared. So if they had 20K worth of loans, and have paid 30K, the remainder of the debt is canceled. 3) When a borrower goes into default, require them to make 10 payments on time, then they are removed from default. The way the system currently works is that a defaulting borrower not only has their wages garnished but they are expected to pay 10 monthly payments on top of that. That makes it impossible to get out of default. 4) Set up a system where a borrower's income is automatically grabbed from their tax returns, and they are automatically entered into an income-based repayment plan. 5) Allow student loans to be discharged in bankruptcy. It's currently absurd that someone can have a debt that there is no way they can pay off in their life, yet have no way to discharge the debt. 6) At age 65 all student loan debt an individual has is automatically discharged.

Perhaps adjust the rules for college funding so they aren’t incentivized to build these massive sports stadiums

Imagine: You go to a university to get a bachelor's degree Rack up anywhere between $50,000-300,000 student loan debt that doesn't go away You struggle through school and eventually graduate Your plan is to completely evaporate your debt in a few years with your presumably high salary Turns out you can't find any jobs with that type of salary so you have to chose what you have on hand Eventually you end up with a bunch of debt and a salary that can barely fulfill your humble lifestyle GO universities and their fat pockets!

Plot twist: I got a bachelors and masters degree within the last 10 years with no scholarships, loans, or assistance from family. It can be done, if you are smart about it. I definitely do not agree with student loan cancellation.

just right off debts to anyone who got or gets a first class degree in a STEM field

Bruh if not 10k at least 5k, heck remove interest. Anything! This administration is good for dragging their feet and not keeping promises !!

The fact that people are invested in other people's debt - doesn't this sound like the housing crisis?

It’s a principle agent problem, simple as that. The universities have no incentive to keep prices down because of the loans, the people giving out the loans always get their money back and young people are told college is the only path to the middle class. Nobody has the interests aligned.

The entire system needs to be overhauled. Ever since the existence of student loans, it's just given colleges more of a reason to increase the price. Income Share Agreements are becoming more popular.

Before debt cancellation, what really needs to happen is the government needs to heavily regulate universities by putting a cap on tuition (the public universities at least; not much can be done with those who decide to go to private universities). Furthermore, they need to punish predatory loan companies that charge extremely high interest rates for students and promote income based repayment plans more. Finally, there needs to be some mandatory elective high schoolers should have to take so that they are well aware of what they are signing up for should they decide to attend university and sadly that should include statistics on the majors and degrees that will be able to pay off those loans. Cancelling student loan debt is just putting a band aid on a gunshot wound; until we remedy the root of the problem, nothing will change. As much as I want student debt cancelled even though I have none myself, I would not hold my breath on it happening anytime soon.

Tuiton is so high in the first place because institutions saw the introduction of student loans as an excuse to endlessly raise fees!

I don't have a problem with paying back every penny I borrowed. It's the interest that is killing borrowers. I'm paying interest on interest. Cancel interest or make it 1% and that solves the problem for so many.

The govt had no problem forgiving 90% of the $800 Billion PPE loans. $600 Billion of which, has never reached the intended people(the workers) but has been slipped into the pockets of owners 🙄

How about just make college affordable for future generations…

Applying bandaids when the whole system needs an overhaul

Remember, there are economic risks to student loan forgiveness, but we'll disregard the economic risks when it comes to bailing out big corporations. America the Great!

Great content, Money is worthless until you put it to work.... I made my 1st million invested into Stock market. Making money is the plan and with Crypto/stock Investment your plans can be fulfilled.

Starting early is the best way of getting ahead to build wealth, investing remains a priority. I learnt from my last year's experience, i am able to build a suitable life because I invested early ahead this time. I pray that anyone who reads this will be successful in life, 🙏🙏🙏

Speculation: Student loans will NEVER get canceled and college tuition will CONTINUE to rise.

Graduate high school and put on your resume that you went to college. I did it and they never checked.

On telegram

No political risks with shoveling credits to billionaires, but forgiving $10,000 in debt to students is risky? Wow.

It's actually obscene how much students are paying for their education while simultaneously the professors who are actually teaching them are paid so precious little for our labor....it seems this current set-up is really not working for anyone who is involved in the actual process of education from either side...

Universities hike up tuition costs cause they can get away with it. The tuition for the school I went to went up by six grand from when I was a freshman to when I graduated and they still kept increasing it even after I left. And where did this money go? Well not to the students, every year people talked about how their programs were getting cut.

The problem is there is no demand for these students once they graduate to be able to pay off these debts. Like I never required student debt and I paid 100 thousands to a school that was supposed to help me get a job. Frankly I believe school's should be incentivized get their students jobs.

The Wealthy: We need tax cuts! The Government: DO IT!!!! Everyday Americans: We need help too! The Government: There are logistical issues and maybe inflation. Idk man.

Interesting that we can send billions of dollars aid to the country of Ukraine (bipartisan) and no one is screaming about inflation..but can’t use that same money to help improve the lives of American citizens to free them up to participate in the economy without mountains of educational debt that can’t even be discharged in bankruptcy🙄.

"lower income borrower" Yeah earning $125K a year is "low income". Only $10,000+ a month in salary. I mean HOW could they afford to pay their student loan that also enabled them to have a job at $120K a year instead of making 40K a year that likely the median income is for Average American.. Yes, forgive this loan THEY themselves decided to take to invest into their education to make more money. I mean those poor slobs. Let the poorer income non college educated pay for it. I mean they are just un-educated "scum" anyway... This is how you drive voters away...

Someone's gotta pay those one way or another...

As someone who is fresh out of college, I definitely regret taking out loans and my degree isn't doing me ANY favors. The fact that 18 year olds are given predatory loans before they can even buy a bottle of wine is just sick

Honestly the government needs to regulate colleges (and all higher education). The amount they charge is insanely high. Including the books etc etc

The decision has long since been made. The final cancellation amount for federal student loans is $0

@2:28 So below $125,000 a year, you’re a low income earner?? Well, that’s inflation!!! 🤬

We could easily solve this with free college. It worked in Germany, Sweden, Norway, The Czech Republic, France, Iceland, Luxembourg. *It can't be that hard to figure out.*

How about we cancel interest and fees..... allow student loans to pay principal only. Since the whole point of interest is because of expected inflation and inflation is no one's fault except government. Cancel interest and fees stop growing the loans for federal loans. I mean it's supposed to be federal "aid" anyway. How is it aid if it's exactly like a personal loan.

I love how all of a sudden inflation is "a concern" with Student Loan Forgiveness. Why was inflation not "a concern" back when Covid started and The U.S. Federal Reserve helped many (especially, Large Cap) corporations? Why wasn't it taken into account back then? I really hope that they sign the $10,000 Student Loan Forgiveness bill. For many, that's exactly what they need for taking out a mortgage to purchase a home.

Why stop at student loan? How about medical-related debt forgiveness? Or home mortgage?

To assume that forgiving some student loans now may make future borrowers automatically expect to be bailed out seems to be a slippery slope boogeyman the economists are pushing. If I catch a break now, there's no way I'd be inclined to take out more loans and get back in that mess. I'm rather unimpressed with that argument from the video.

PEOPLE CRY, “MY BODY MY CHOICE, WELL I SAY “YOUR STUDENT LOAN, YOUR PAYMENTS!

I still don't understand why Americans have to pay for higher education. It should be free like "congratulations for not getting shot in school, here go earn a post secondary degree". Living in Europe, and hearing Americans still to this day say America is the best country on earth despite having no free healthcare, education, no parental leave, no paid vacation (or something lie 2 weeks).... *eye roll in European citizenship

Why not make college like high school, you shouldn't even have to pay to go to school, maybe the colleges need to be part of the regular school system, then we wouldn't have so many Homeless running the streets.

In my view, student loan debt became a crisis after the 2005 passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (P.L. 109-8), which exempted student loans from bankruptcy discharge. There are surely a variety of other factors contributing to the rise of student loan debt; however, many who would otherwise seek discharge of those burdensome loans have had no legal relief since 2005. Rather than fight over government "forgiveness" of the loans, doesn't it make much more sense -- and provide a fairer solution -- to allow individuals suffering under the burden of student loans to seek relief through bankruptcy? The US bankruptcy laws allow well-to-do people and corporations to unburden themselves of excessive debt. Why not younger people who cannot find employment with sufficient income to pay those loans off?

The republicans got rid of Government backed loans and spell Grants back in the 90’s and early 2000’s . Privatization predictability led to abuse

To me this seems excessively expansive and it does not tacle the real issue that are underregulated university tuition. Public universitets should provide educational for free just like in europe.

Land of free. FREE Health care and abortion services; FREE private education and political midterm traction.

why not eliminate compound interest for these loans? a flat interest rate return with a total price return (much like buying a car, with no missed payments).

Note that us taxpayers pay $1 trillion a year to the Military Industrial Complex. If you’re not familiar with a Military Industrial Complex, please look it up. It’s basically a way to funnel the wealth of the middle-class into corporations and concentrate wealth to the rich. This whole talk about us taxpayers not having enough money to pay for college education is precisely because it’s wasted on the Military Industrial Complex. If we cut off that gravy train, we have $1 trillion a year which can pay for college, healthcare, Social Security. Things like that don’t listen to the stupid propaganda

it's simple... if Biden doesn't deliver on his promise, 40 million people will not vote for him again in two years, or this November. That is the single most important issue for millions.

Actually it doesn’t. Most people in the United States and international community, owe their lives to someone with a higher education. Probably educate people for free if you value your lives?

“Cancelling ALL debt would raise inflation by 0.3-0.5%” I’m shocked you fail to realize how NEGLIGIBLE that is on the current scale 🤯

All they care about is your votes lmafao

Why is helping the poor or those in debt always worse for the ecconomy, but someone hoarding billions and not paying taxes is "good," for the ecconomy?

The corporate overlords deploying the WSJ videos to avoid losing a bit of money.

Thank you for explaining this in a non partisan way. Tired of all these partisan reporting blaming the left and right.

There's people out there working just enough to feed their family but we have college educated people WANT your taxes money to paid off their debt. They signed those papers! High Social Classes - Likely to have greater education. Low Social Classes - Some/No education.

So… why would I pay a doctor, lawyer and engineer’s loan when they probably make more than me. 125k a year is not low income.

I have a 4yr degree. It's not necessary. That's my conservative problem with all of this. I came from a small town and now I see the larger world as just runamok with costs and programs. All of it ultimately just supports lifestyles that are totally unnecessary. I don't like any of it. I don't like Biden. I don't like Trump. Quiet USA while my heart gently weeps. 💓

"... millions of people would have to verify their income..." Millions of people already verify their income every year when they file their taxes. If it isn't a hardship for filing taxes then it isn't a hardship for getting tens of thousands of dollars of student debt forgiven. This is a ridiculous argument against student debt forgiveness. As all issues of revenue must originate in the House of Representatives, Biden may in fact not have the authority to forgive student debt with the stroke of his pen. If you are a student with a lot of debt then vote for _Democrats_ in congressional elections. If you are an investor who holds a large quantity of debt backed securities then you knew from the outset it was a high risk investment, and after 2008 if you didn't know that then you're a fool.

America is f*cked, I have student loans and never missed a payment. Some people shout “I paid mine what about me!?” Things change education is way more expensive and wages have been stagnant for the last 20yrs so the math doesn’t check out. I believe America needs to pick a direction and go all in with only two options. 1 forgive all loans and regulate education so that anyone can go if they want to or 2 never forgive and never finance student loans ever. It’s the half steps of our government that causes more problems than making long term positions for future prosperity. As of now my children will not be going to college unless they can pay for it themselves outright it just doesn’t make financial sense and if they never go so be it. I have had student debt since I was 19 I’m in my 30s and it won’t be paid until I’m 50. Our country will eventually be illiterate and only solely educated through texts displayed on social media and TikTok with a ceiling point of a 12th graders intellect. Sad

Apart from debt forgiveness why doesn’t the Federal gov fix the fees of public institutions which receive government money ? That will ensure education remains affordable for all.

So the following idea is purely pandering to the ppl who’d prevent this out of fear of its impact on inflation bc of the new discretionary income this would create 🤦‍♂️; Why not let borrowers invest up to what their monthly payment is in a specific account(call if the Biden Bucks or some legacy title lol) and let them not have to pay cap gains up to x . Just spitballing here but this could be invested solely in something like the s@p, perhaps gov bonds, or allow autonomy. Cap the non taxable cap gains at a multiple of the amount forgiven. Honestly not my worst armchair politician stance. Fwiw I have a bachelors but no student debt, but I do think reform is needed and that they’re really grasping at straws with these cons. We know this won’t pass as Bidens home state is where all the loan biz’s are located so I just don’t see it happening. Also it’s only going to foster resentment from those that weren’t included and it’s not going to lead to many new votes from ppl sooo thankful. The DNC needs to get it together and have him decide to not run for re-election. We can’t lose the WH and hes not gonna cut it

End the capitalization of interest!!!!

Ya like if the dems don’t they won’t be getting many many younger votes…. Since our demographics won for them last time… that seems like a super smart idea.

Two things.... I did not take any student loans when I did my Undergrad or my Master Science Degree....I worked to pay the fees. worked hard and studied hard. Will Biden give me a tax rebate if he decides to pay off their student debt? secondly... studying at College and University has become so un-necessarily expensive and is the perfect business for printing money.

Come on just did it, cancel debts, the goverment can printing Money as they want.

Having never taken student loans for myself, my wife (we both have Masters) or our two daughters who have graduated from college you can guess where we stand on this issue. One thing that keeps getting ignored in the comments is that there is NOTHING in the Student Loan program preventing the students from spending the money on anything (trips to Cancun, designer hand bags, drugs) they want as long as they are registered (paid the registration) for school. For example, a friend of our older daughter went to a UC (University of California) school like our daughter did and owed $106K at graduation. Tuition was $14K/year. What did that other $58K get spent on? We love that girl as a close friend of the family but let's be straight here. She went on vacations, never worked while in school like our daughter did, threw a huge graduation party where she rented a Duck Boat for 30 people (we drove our daughter down to the party and waited til it was over to drive her home as we didn't want her driving after drinking) and her degree was in International Studies. She got a job with an NGO after college for $15/hr in NYC. Uuuh. Finally, her father was a professor at a very good university and she could have gone there for free but wanted to get out of the house and go to a school a few hours away so her parents refused to pay for her college. Now, again, we love this girl as she really is a sweet kid but why should the tax payers pay for her education? Why should an electrician working in the oil fields who never went to college and is raising a family living in the desert have some of his earnings going towards paying for this persons college education? The question sleazy politicians on both sides of the isle have to consider is whether there are more voters who would gain from forgiveness or more voters who would be upset by forgiveness.

I thought I would never say this, but Trump was better.

Why not just force the schools to refund the overpayment?

Idc if they bail out student loan debt .....its ok for the government to bail out corporations that make billions in profit but its not ok to bail out student loan debt?????

I mean what high schooler really makes good decisions? Adults in their 30s and 40s make terrible decisions especially financially. It’s not solely the students faults it’s mainly the high-schools and private schools that are pushing this business model of going to college. Don’t blame the student, they are pretty much brainwashed into believing in having better opportunities by furthering their education. If they weren’t brainwashed then their wouldn’t be a countrywide issue of large amounts of student loan debts. Blame the systems and exorbitant college tuition and fees just to pay those folks in high places.

The government should have never trusted a 17 year old with hundreds of thousands of dollars in loans for a “college experience”. I 100% blame the federal government for being so immature and shady with loaning to children. They need to start taking responsibility and fix their mess.

JUST CANCEL IT 💯💯💯💯💯💯💯

Good old fashioned Democrat vote buying.

WHY NOT MAKE COLLEGE EDUCATIONFOR STATE UNIVERSITIES FREE OF CHARGE FOR GOOD? COME ON

I know I’ll be out there to vote! My decisions for voting will for sure be impacted by student loan legislation that may/ may not come.

just think if it as a refund on the interest the government shouldn't charge for education, and continue to eliminate the interest for future students, Bada bing.

Student loan forgiveness rarely makes sense. Having a college degree has a huge return on investment over a lifetime. The people you're forgiving are middle and upper middle class people off the backs of working class people's taxes.

Wipe out student debt amd make public college free

And millions of Americans as crippled spenders due to immense loan debt for decades isn’t more of an impending disaster? REGULATE THE UNIVERSITIES. They don’t need more fancy fountains and lazy rivers. They need fair prices.

Free community college for all.

So to me it just sounds like we need to implement laws alongside forgiveness to prevent price gouging from colleges and predatory practices from banks

Why is college so expensive? My prof needs a new ferrari

When organizations like yours have conservative economic views, do you ever have anyone in the room that knows what it is like to raise two kids and run a house on say, $45,000.00 a year? Just wondering.

I didn't watch the video, but you know what else comes with risk? Shorting a company then publishing lies to manipulate the companies share price by routing securities with fraudulent intent to deceive it's investors all across the board for personal gain. I.e. own companies benefit. Also, you don't pay for a service that didn't provide what was advertised.

The right thing to do is cancel the interest on these expensive loans. Canceling all the debt isn’t going to solve these issues for people who had the opportunity to go to school but didn’t because of the financial toll it would bring. Military and other non traditional routes were taken to afford school but cancelling these loans all together would diminish the benefits earn by those who served. Something to think about.

insted of Student-Loan Forgiveness. why not ... 1 - refinance old student-loan (with lower interest) order by high to low interest. 2 - start Student-Loan interest celling for new loan.

Oh, no! How could we ever deal with an inflation increase of 3.6% after we stop paying a quarter of our salary in student debt every month.

Terrible system with terrible consequences ... It's unfair all around.

Wouldn't solve the problem rather exaggerate it. Problem started when government started giving lot of credit which allowed colleges to ramp up fees.

Look how badly it worked out for other countries. Heaven forbid the middle class could afford a house….

Student loan forgiveness comes with positive economic benefits. Of the $1.9 trillion in student loan debt, over $1.4 trillion of that is held by the federal government, ie the currency issuer. It’s literally as simple as pressing delete, and this has no negative economic or fiscal impact. None. Nor would paying out the rest that’s held by other loan entities. This is the power of the currency issuer. Now, think of the real economic impact of deleting this debt. Hundreds of millions of citizens have more money. More to invest into our lives which in turn invests into and spurs our economy forward. And no, inflation is not a huge risk. Price gouging and monopolies are the risk but we are already knee deep in this. Basically Gougflation. This whole segment is nothing but propaganda intended to keep our electorate ignorant of how our currency really functions. I urge anyone reading this to read The Deficit Myth by Stephanie Kelton. It’s a good place to start learning how and why this video is miseducating propaganda.

Okay cool turn off the pauses. Don’t help with cancellation. Watch as millions file for defaults. DOE has already saw millions will default when the pause is over. Also, time to bleed colleges dry. Many schools are already seeing declines of enrollment and some say they’re closing up before end of the decade. The era of college = good life was gone long before we’ve ever entered. They know it. We know it. Jobs are all about who you know and the network that comes with it. Or spend years trying to make paycheck to paycheck whilst being crushed by over inflated rent/housing prices and still crippling the economy.

I have a bad feeling they wont implement any form of student loan forgiveness, or what they give will be very minimal it does literally nothing. But many of those suffering under the debt will be unable to resume payments due to multiple economic factors slamming the population. I predict there will be a lot of people who just simply refuse to resume payments and it will eventually force the government to make a more reasonable solution whatever it may be.

Don’t have an issue with forgiving student debt, my issue is only forgiving student debt and not doing anything to fix the higher education system in the US. Unless we reign in tuition at universities this will just be a bigger issue in 15 years than it is now. I believe that loans spent on tuition should be forgiven but loans for housing and or other things like cars or vacations (I know more than one person who has used their student loans to pay for things) should not be forgiven, so a blanket $10,000 or however many dollars forgiveness would do more harm than good

I have been paying my student loans as much as I could budget even when the forbearance started 28 months ago. I don’t mind paying back what I borrowed. My grip is that they charge interest on these loans. I practically borrowed tax money that I paid out through the years working. Another rule is not subsidizing graduate school loans like undergrad loans. They were charging interest on these loans while “in grad school”. By the time I completed my graduate program, I had 2 years of interest added and capitalized into my principal amounts. I don’t mind if this forbearance period continues because it gives me more time to pay these loans off with more direct principal payments. All this talk about forgiving 10k for each borrower is just wishful thinking. Guarantee, a large # of existing borrowers have left these loans dormant for 28 months. They can only push this stale period for so long before the government cometh again. I hope by the time that deadline comes around, I’ll be done paying what I owe and put this obligation out of my life.

at this point for how many BILLIONS we have sent UKRAINE we could have paid off their debts i would gladly support money to AMERICA FIRST instead of helping a foreign country that could CARELESS ABOUT US no other country is helping them and while we are busy doing that CHINA has slowly grown the largest NAVAL FLEET IN THE WORLD #AMERICALAST #AMERICASDYING

Student debt will keep rising though. If nothing about the price structure of college changes, this won’t help long term

Don’t borrow if you can’t pay it back. Nobody is going to pay you for a Masters in Basket weaving. Unfair to those that didn’t get to go to college, or who saved & scrimped & planned for decades.