Student loan debt: Borrowers brace for Supreme Court decision

[ThatRobGuy]

https://thehill.com/homenews/education/4068249-student-loan-debt-borrowers-brace-for-supreme-court-decision/

President Biden’s student debt forgiveness plan will finally see an end to its months-long limbo in the courts this week.

With repayments set to start again in October after a years-long pandemic-related pause, the Supreme Court’s forthcoming ruling on the legality of Biden’s proposal is the last piece of the student loan puzzle, offering a clearer landscape moving forward.


Many borrowers are fearful as the conservative-majority Supreme Court, which could make its decision known as soon as Tuesday morning, seemed skeptical of Biden’s plan during oral arguments in February.

While Democrats have tried to keep an optimistic tone, Biden himself has even shown skepticism at the idea the Supreme Court will rule in his favor.


“I’m confident we’re on the right side of the law. I’m not confident about the outcome of the decision yet,” he said in March.

Advocates found a bit of hope Friday after the court released an 8-1 decision in a case where two Republican states tried to challenge the Biden administration on immigration policy. The high court ruled against the two states, saying they did not have standing to sue.

If the plan is ruled legal, the timeline of events is a bit unclear.

 

[Yttrium]

I predict the Supreme Court will slap down Biden's plan. This is something Congress should be approaching, not the prez on his lonesome.

 

[ThatRobGuy]

This is something Congress should be approaching, not the prez on his lonesome.

Agreed...

And it should also be joined at the hip with some discussions/plans as to how address the issues that created the problem in the first place.

Setting the precedent of "we're just going to start forgiving the first $X worth of student loan debt for borrowers" doesn't do anything to change the incentive structure universities had that led them to overcharge in the first place.

 

[RDKirk]

Agreed...

And it should also be joined at the hip with some discussions/plans as to how address the issues that created the problem in the first place.

Setting the precedent of "we're just going to start forgiving the first $X worth of student loan debt for borrowers" doesn't do anything to change the incentive structure universities had that led them to overcharge in the first place.

They ought to look at each student and determine whether they've actually paid back the principal borrowed plus a reasonable interest on that amount (say, 6%). If so...consider it paid off.

The criminal part of the system is the way the interest is accrued so heinously beyond the principal. It's a loan sharking scheme the Mafia would love to have.

 

[IceJad]

Sometimes I wonder why people are surprised you have to pay back a loan. It is called a loan for a reason. Unless the definition of loan has changed I can't for the life of me understand the student loan issue in the US.

1. You're not forced to get a student loan. If you can't afford the education of your choice, find another that best and nearest suit your interest and economic conditions.

2. If you get a student loan means you agreed to the terms - interest and all. Now you call for your poor decision to be forgiven due to repayment issue? What backward mentality is that? Don't sign if you are not 100% comfortable with the conditions laid out.

Why can't you be responsible for your own decisions? The world is never ideal. There are gives and takes. Pros and cons. I didn't go to the school I wanted because of my economic REALITY. I know it will burden my parents and me. I willingly gave up on my first, second and even third choice of school due to the fees. And I never regretted it. My parents kept telling me that they can afford my choices (an obvious lie), but I knew from our household it will cause suffering for them. And we are in no way poor. Yet I took their burdens into considerations. I also don't want to burden myself to repay future loans.

I did right by them. I went to school which is not known as a forefront runner in the subject I wanted. It was way cheaper because of it. I made up by being one of the student who graduated with distinction. I started working as soon as I got out. Started as a lowly IT admin. Now I'm proud to have improved my parents lives, they now live a better retirement because I alone can pay for better things.

This is not to brag but to show that your own choices mattered. You make the best of an unideal situation.

 

[ThatRobGuy]

They ought to look at each student and determine whether they've actually paid back the principal borrowed plus a reasonable interest on that amount (say, 6%). If so...consider it paid off.

The criminal part of the system is the way the interest is accrued so heinously beyond the principal. It's a loan sharking scheme the Mafia would love to have.

Actually, the way student loans are calculated (with regards to interest) isn't all that unfair.

SmartAsset provides a nice little calculator for determining it:

So on that $50k borrowed, if you stretched it out the full 10 years, you would've ended up paying back around $62k (meaning around $12k worth of interest).


That's not all that unreasonable for a loan that's not backed by any sort of collateral.

I still the bigger problem as these schools gleefully signing people up for some of expensive degrees that offer little in the way of job prospects at the end.

 

[RDKirk]

Actually, the way student loans are calculated (with regards to interest) isn't all that unfair.

SmartAsset provides a nice little calculator for determining it:
View attachment 332903

So on that $50k borrowed, if you stretched it out the full 10 years, you would've ended up paying back around $62k (meaning around $12k worth of interest).

Yeah, that's how loan sharks present their terms as well. They leave out details such as the interest beginning to accumulate from the first year, but emphasizing that payments don't have to start until after graduation.

I still the bigger problem as these schools gleefully signing people up for some of expensive degrees that offer little in the way of job prospects at the end.

That, too. And all the degrees are expensive.

 

[ThatRobGuy]

Yeah, that's how loan sharks present their terms as well. They leave out details such as the interest beginning to accumulate from the first year, but emphasizing that payments don't have to start until after graduation.

If a student racks up $50k worth of student loan debt on Journalism or Visual & Performing Arts degree (two of the more popular degrees of the last 2 decades.

Even with a 0% interest rate, they're still in trouble.

For a person who comes to that realization of "wait a minute, there aren't many jobs in this field and the ones that do exist don't pay as much as the guidance counselor said they do", being on the hook for a decade for $450/month instead of $525 is going to do very little to solve the predicament they find themselves in.

 

[RDKirk]

If a student racks up $50k worth of student loan debt on Journalism or Visual & Performing Arts degree (two of the more popular degrees of the last 2 decades.

Even with a 0% interest rate, they're still in trouble.

But those kinds of degrees are the ones within the capabilities of the majority of people. The majority of people cannot be successful in STEM studies. If you want everyone to get a bachelor's degree, you must push Journalism or Visual & Performing Arts and such.

Makes one wonder what the heck good the counselors in high school and college are. I guess their job is simply to hawk the product. School guidance counselors are like the women that hung outside the bars in the Philippines.

If guidance counselors were really doing the job people think they're doing, they would be telling the majority of high school graduates to get vocational training, not a bachelor's degree.

For a person who comes to that realization of "wait a minute, there aren't many jobs in this field and the ones that do exist don't pay as much as the guidance counselor said they do", being on the hook for a decade for $450/month instead of $525 is going to do very little to solve the predicament they find themselves in.

But they also get bogus information about those jobs, buried under the "undeniable" statistic that any bachelor's degree will give you a better life than any job without one can get you.

 

[ThatRobGuy]

But those kinds of degrees are the ones within the capabilities of the majority of people.

Agree with most of what you said in your post, with a minor objection here...

I don't think the majority of people have the capabilities of being a good journalist or artist. (emphasis on the latter one)

A person could go to school and spend an extensive amount of time and money trying to learn, and they'll likely get better than the average person or learn a few new techniques, but the artistic is something people have or don't have.

You're not going to be able to "teach" a person to be able to play like Stevie Ray Vaughn.
You're not going to teach someone how to be Brad Pitt or <insert actor here>
You're not going to be able to teach someone how to have an eye/ear for composition and bet able to produce music or movies like Rick Rubin or Quentin Tarantino respectively.


The way I've heard it described before is the difference between "Skilled" and "Gifted". While the two circles do have some overlap, you can teach someone a skill, you can't teach them a gift.

 

[RDKirk]

Agree with most of what you said in your post, with a minor objection here...

I don't think the majority of people have the capabilities of being a good journalist or artist. (emphasis on the latter one)

A person could go to school and spend an extensive amount of time and money trying to learn, and they'll likely get better than the average person or learn a few new techniques, but the artistic is something people have or don't have.

You're not going to be able to "teach" a person to be able to play like Stevie Ray Vaughn.
You're not going to teach someone how to be Brad Pitt or <insert actor here>
You're not going to be able to teach someone how to have an eye/ear for composition and bet able to produce music or movies like Rick Rubin or Quentin Tarantino respectively.


The way I've heard it described before is the difference between "Skilled" and "Gifted". While the two circles do have some overlap, you can teach someone a skill, you can't teach them a gift.

I didn't say they'd be good. But they could finish the degree program.

I thought you had posed "Journalism or Visual & Performing Arts" as merely examples of soft degrees. It could just as easily be sociology (which is probably more frequent than journalism or visual and performing arts).

 

[ThatRobGuy]

I didn't say they'd be good. But they could finish the degree program.

I thought you had posed "Journalism or Visual & Performing Arts" as merely examples of soft degrees. It could just as easily be sociology (which is probably more frequent than journalism or visual and performing arts).

They are "soft degrees" in that the the BLS job forecasts (in combination with degrees conferred data from NCES) paints a rather weak picture in terms of prospects.

Both fields have about 90,000 Bachelors or Masters degrees per year conferred

The BLS prospect for openings in Journalism is 45,000 openings over the next 10 years. (Which equates a total of almost a million journalism majors fighting over 45,000 slots over the next decade)

Visual and performing arts is even more of a bleak outlook. 2500 job openings per year (which a good chunk of that being part-time or gig work)


With regards to sociologists, that's actually got a better-than-expected forecast

With several relevant fields (like being a case worker, social worker, counselor, HR), you'd actually be way better off getting a degree in sociology than in Journalism or the Performing Arts.

 

[RDKirk]

With regards to sociologists, that's actually got a better-than-expected forecast
View attachment 332913

With several relevant fields (like being a case worker, social worker, counselor, HR), you'd actually be way better off getting a degree in sociology than in Journalism or the Performing Arts.

I'm not here to debate which soft degrees are better than others...only to point out that they're all weak career fields compared to the cost of the degree.

Right now, sociology degree holders are inventing their own jobs mostly out of thin air or working for the government. The latest scam is DEI. But those positions are parasites on the economy, not profit centers. They don't make any company a dime more money. The upsurge of HR departments after the Civil Rights Act had some utility in helping companies stay legal, but this DEI scam is nothing more than companies being coerced into looking good.

And a good many of those positions stand to be replaced by AI.

 

[Always in His Presence]

There is this thing called personal accountability.

Everything in life costs: marriage, children, cars, home ownership. There are a multitude of grants available, scholarships, community colleges, work programs.

Additionally, the applicant should be able to read and comprehend the terms of the contract, fully understanding how much the costs involved.

When you sign a loan document, you enter a covenant with the lending institution. You give them your word you will repay what you have received.

Our current Whitehouse Octogenarian is buying votes, nothing more, nothing less.

I graduated college in 1981, and he wants me to pay for someone else’s debt through my taxes.