re: Student Loan Debt Cancellation - Should people who paid off during freeze get refunds?

There needs to be a cap based on degree you are working towards... people shouldn't have 100k student loans while getting an art or teaching degrees.


Now I understand some who are at 100k it is mainly because of interest, which is a bitch, but they've only paid the minimum. Of course people like Sallie Mae were not honest with borrowers either. I was with them and they never told me about some of the options that were available to help pay off my loans.

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Brunner v. New York State Higher Education Services Corp., 831 F.2d 395, 396 (2nd Cir. 1987)

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This is the case that established the Brunner Test, making it very difficult to cancel student debt in bankruptcy.

Why? Well because Ms. Brunner filed for bankruptcy 10 months after graduating with her Masters degree and 1 month after her first loan payment came due.

She was not disabled and hadn't even been working a year yet when she decided, "Nah, I have a lot of debt and I'd rather not pay that back."

Her worthless freeloading arse is why the courts tightened up the rules on student debt and bankruptcy. Otherwise the federal student loan system would have crumbled back in the 90s when people figured out they could run up bills and never pay them back.

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Why?

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It's very simple, imagine the precedent this sets for current borrowers, people in college and future borrowers that see the govt forgiving EVERYONE'S student debt to whatever degree they do, and they will promise more without a doubt. At that point if you have loans, why ever pay them? If you're able to take out loans after seeing mass forgiveness, why not just max it out and not pay yourself?

It's absolutely stupid. They need to stop giving out loans if they are just going to forgive it. To say people need this and it's a problem but then continue to hand out money creating more of the same problem is absolutely asinine.

This is nothing more than a vote buying scheme for a party currently struggling in a big way. All at the expense of the American taxpayers and creating even bigger future problems for someone else to deal with. All for $10k of "forgiveness" to people even making up to $299,999 of income in a household, it's a joke. $10k of "Forgiveness" isn't really helping anyone. Going out to a bunch of people who have zero issue paying on their loans. It's just an amuse-bouche for a bigger prize they want people to vote for.

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The only way that would be fair is to have it be means tested, and any forgiven loans are recouped from the school instead of the taxpayers.

That will punish schools for excessive tuition and bogus majors.

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Means test would be great. Could be something as simple as a multiplier of the the average income 5 years post graduation. The averages would be based on the average incomes for a chosen major from that school. Although the interesting caveat will be how certain averages will be artificially inflated by professional athletes

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Should people who paid off during freeze get refunds?

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Sure. Why did you do that though, makes no sense.

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"Just allow people to write them off in bankruptcy"

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I am fine with that if they lose all of the benefits of that degree. If you write off your student loans then you should never be able to work in any capacity where any requirement or recommendation is to have a degree.

You don't get to write off your mortgage and keep the house so why should you be able to write off your student loans and keep the benefit?

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This would also be bad policy—under non-chapter 7 bankruptcies, a degree would help the debtor get a better job to meet payment plans so that creditors eventually do realize some of their loans. If you remove the degree, you remove the increased possibility of creditors to get back money

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Nonsense, the market would fix all this, assuming it was a free market.

Forgiving debt is a terrible idea and doesn't solve the simple problem nor the complex issues at play.

The best strategy would be to have everyone on income based repayment plans. Move all the interest rates to 0. If your income is below a threshold (something relatively low like $30-40k) then you do not have to pay anything back. The balance does not grow because the interest is 0. Your balance does not shrink therefore if you become successful in the future then you have to pay it back. Why should we forgive student loans if someone were to become successful and be in a position to pay it back? Upon death it gets netted out against the estate and any remaining balance gets forgiven at that point (heirs shouldn't be burdened by it).

The majority of student loans (value not number of holders) are held by doctors, lawyers and other people with professional degrees. I would love to hear the approval ratings by tax payers when they know that the majority who stand to benefit from this are doctors and lawyers.

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I’m not talking about useless degrees

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That's literally what student loan forgiveness is about.