re: Starting in august, economy will take a big blow

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Are you talking about PPP loans? Why should we imagine that? The government shut their businesses down. Not a great comparison to student loans.

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Except that a large percentage of businesses that received those loans didn’t have to shut down anything. Businesses that saw normal, or even increased, profits over that period still got massive loans forgiven. I find it interesting that the same people who will call student loan borrowers lazy parasites for advocating for loan forgiveness will call those business owners savvy for taking advantage of the law.

Not that you fall into that category Teddy, but I’m not sure if your blanket defense of PPP loan recipients is reflective of reality

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You think the folks that were actually paying student loans decided they would stop paying when interest rates were paused?

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Intelligent ones did. I haven’t paid a cent in SL in over 3 years

I think the weirdest thing about PPP is that people seemingly were surprised by any of the waste.

Accepting the fact that local and state governments were shutting down many, but not all, businesses within a few weeks period (whether it should have happened is beside the point of this discussion), there wasn't going to be targeted relief on a nationwide scale. It was basically impossible.

Since the post provided no nuance, I also did not provide any.

Student loan borrowers are only taking advantage of a change in terms in an agreement they have with the loan holder, in this case the government. No issues with someone doing that.

But comparing a student loan borrowers who voluntarily took out the loans just isn't the same situation as a business owner with a bona fide need for PPP, which is what that post was equating. Even if inflated tuition prices are due to a more convoluted involvement of the government. Every program the government runs has fraud, so in my view it is sometimes a distraction to the real discussion.

Full disclosure, I went to school after the 1980s so I have student loans.

Americans are notoriously shitty at managing money. I'd bet 20% realized this was temporary and 80% went and bought a bunch of shite they won't be able to afford in 2 months.

And make no mistake, this will be blamed on Republicans politically and become a big topic of conversation in the election cycle.

This point is a bit of a hobby horse of mine, but it’s absurd the fed is left alone to fight inflation. Inflation above 8% is an absolute full fledged fire that must be fought, and the only tool to do it can’t be interest rates.

Student loan collections represented ~75 billion to the treasury in 2019. Pausing student loan repayment amounts to a 75-100 billion cash stimulus program.

This is one incredibly low hanging lever congress can pull to join the inflation fight, and particularly where it matters in consumer goods. But alas congress has largely sat in the peanut gallery and left the fed to do the only thing it can do - slow the equity markets and blow up the housing market.

All that said, between this, a tightening of the credit markets after the bank failures, and the decrease of freight shipping prices I do think inflation will be tamed by year end (and hopefully not with a recession)

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Are you talking about PPP loans? Why should we imagine that? The government shut their businesses down. Not a great comparison to student loans.

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PPP “loans” are forgivable if used properly.

I was referring to the $370 billion in 30 year loans people took out…mostly just because they could. These actually have to be paid back JUST LIKE student loans should be.

A majority of them aren’t ..also like student loans.

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I thought at least they would push forward the 10 or 20k or whatever to soften the blow and kick the can down the road until then but even that probably won't happen.

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The 10/20k is still happening pending SCOTUS review. SCOTUS decision coming any day now. If they clear it, it’s done.

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My thinking is that between runaway CC debt, no savings, overextension on homes and autos etc. A lot of middle clas people are really close to losing their asses and student loans may be the thing that makes the bottom fall out.

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This.

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PPP “loans” are forgivable if used properly.

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And this is the problem with that program. The recipient can easily cook their books to make it look like the funds were used properly, unless and until they are audited. There have been numerous stories about these loans being forgiven only to find out the person that received the funds used them on houses, cars, expensive clothes, vacations....

Our bank made us submit "proof" of how the funds were used before submitting the application for forgiveness. Some banks made their customers signs a few forms and submitted the forgiveness without looking at any records.

Idiots who are default on student loans aren’t the big players that run the economy or stock market.