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News (NBC) Biden and top Democrats split on how to cancel student debt - Cancel Debt Via Executive Action

ManofOne

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A group of prominent Democrats announced legislation on Thursday calling on President Joe Biden to cancel some student loan debt using his executive power.

Senate Majority Leader Chuck Schumer, D-N.Y., joined Sen. Elizabeth Warren, D-Mass., and Reps. Ayanna Pressley, D-Mass., Alma Adams, D-N.C., Mondaire Jones, D-N.Y., and Ilhan Omar, D-Minn., at a press conference to announce the measure.


The resolution, which is nonbinding, calls on Biden to use executive action to wipe out up to $50,000 in federal student loan debt for all borrowers and to ensure there is zero tax liability for borrowers after any administrative debt cancellation. It also suspends student loan payments and interest for the duration of the pandemic and says the Secretary of Education has broad administrative authority to cancel the debt.

Urging him "to be responsive to the movement that elected him," Pressley said that the resolution has over 50 co-sponsors in the House, support across both chambers of Congress and the backing of hundreds of grassroots organizations.


White House press secretary Jen Psaki appeared to throw cold water on the effort later Thursday, telling reporters that while "the president has and continues to support canceling $10,000 of federal student loan debt per person as a response to the Covid crisis," any further action would need to come from Congress.

"He's calling on Congress to draft the proposal," she said, though she didn't say what specific measures he would support. "And if it is passed and sent to his desk, he will look forward to signing it."

She later tweeted that the White House would also be "reviewing whether there are any steps he can take through executive action."

Democrats and advocates have been lobbying Biden for months to tackle the student loan crisis through executive action. Warren and Schumer introduced a resolution in September that outlined how the president could use existing authority under the Higher Education Act to cancel the debt.
 

Woo-Fu

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You're not canceling student loan debt, you're spreading it to every taxpayer, including people who already paid their loans off, made it through college without loan debt, or never intended to go to college in the first place.

I'm confused how people who have a college education can be in greater need than those who don't. There has to be some really bad math in there somewhere.
 

Cravis

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Aug 18, 2006
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If and this is a big IF they do cancel any college loan debt those funds should come deducted from government funds given to colleges. Based on how much debt is forgiven from degrees earned at that college determines how much less federal funding they would receive next year. Of course that isn’t going to happen because that calls for accountability and we are a nation of no accountability. Nothing is ever our fault.
 

HoodWinked

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The ironic thing is that the ones that will benefit the most are white and asian individuals that make the greatest numbers of college students. Also the most wealthy as they're the ones that took out the biggest loans to goto the most prestigious schools.
 
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Hari Seldon

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It fills my mind with fuckery that this is even being considered. What kind of a fucking dullard do you have to be to consider this a good idea? Just blanket forgive 10-50k of student loans with no fucking penalty to the schools who racked up these bills? No cost control measures? There is zero fucking motivation for an individual to ever pay these back in the future now, and no motivation for the schools to reduce cost.
 

Mista K

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It fills my mind with fuckery that this is even being considered. What kind of a fucking dullard do you have to be to consider this a good idea? Just blanket forgive 10-50k of student loans with no fucking penalty to the schools who racked up these bills? No cost control measures? There is zero fucking motivation for an individual to ever pay these back in the future now, and no motivation for the schools to reduce cost.
And mysteriously colleges will get 10-50k more expensive...hmmm
 

oagboghi2

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So how many people are deciding whether to rack up a shitton if school debt as we speak. I mean, why bother even worrying about price when the federal government plans on wiping it off the ledger.

Do democrats not understand the concept of moral hazards or incentives?

Exit: and what about the kids in the future. Will current highschool freshmen be bailed out as well? Or will this a yearly game?
 
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draw4wild

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The even want to make the debt forgiveness tax free. Somehow the deal of l pay off $50000 of your debt if you pay me $10000 still isnt good enough
 

ManofOne

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Why don’t they go after the schools to lower tuition?
Hustling Dave Chappelle GIF
 

Ragnarok

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Hey government, I got an idea:

Allow student loan debt to be discharged under bankruptcy. And get completely out of the direct lending game. Then private banks would only lend to students that will likely pay it back, bloated university budgets would have to be cut, prices would fall, college bureaucracy would starve, and universities could go back to actually preparing children for the real world.
 

Crimson_Fate

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You're not canceling student loan debt, you're spreading it to every taxpayer, including people who already paid their loans off, made it through college without loan debt, or never intended to go to college in the first place.

I'm confused how people who have a college education can be in greater need than those who don't. There has to be some really bad math in there somewhere.
What's not to understand ?

When you are buying the votes of the next generation it doesn't matter where the money comes from . The whole point of the game is to stay in power and you do that by having the country dependent on handouts.
 

FreedomOfSpeech

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Be glad you had the opportunity to go to college and please don't ask me to pay for it with my non-college degree wage.
They're not asking.

Problems here I think are that many people don't really know how to plan for their future, so 'guess ill go to college'.
Schools should have an incentive to deliver educated people when they are done. If they fail, they need to feel it in their bottom line.

But in the end it's just more of the same: failing to anticipate the giant disruptive impact of the internet on society.
 

Ten_Fold

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I’m with canceling $10k in student loan debt I think that isn’t super crazy, now $50k is WAY too much, this is why shit doesn’t get done. Just drop $10k off student loans and call it a day.
 

Goro Majima

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The housing/automotive market is about to get ridiculous.

Really sucks for people that scrimped and saved to get their loans paid off for the past 10-15 years where prices were out of control. You can't ever get back the time value of money of 10-15 years of payments that could have gone to retirement or accumulating equity in a mortgage payment. So in many cases a 35-40 year old might be on the same financial footing as a 23 year old which is really wild.

Like is it not possible to have a carry forward tax credit or something for people that can show they paid their loans?
 
Jan 10, 2021
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I don't think they should cancel student debt, i think they should make college way way way more affordable. That would make student debt manageable. They do this in other countries.

I suggest this ahead of fully subsidised tertiary education as can be found in some particularly badass countries because let's be realistic.
 

regawdless

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I don't like how they now phrase it as Execute Action. It's Executive Order. Stop changing the language so it sounds better for your preferred candidate.
 
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shoplifter

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I could be totally down with writing off the interest and making federal loans interest-free, calling it an investment in people, but redistributing the cost of education for an entire generation of people to the people that have already suffered for 15 years paying their loans off is full-on lunacy.
 

SafeOrAlone

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Someone else said it here, but how do we justify a position where those who went to college need help from those who didn't?
If that is the scenario is which we find ourselves, than college is no good in the first place, and that's that.
 
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Reallink

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Basically giving a free and clear $50,000 to the countries top 25% earners and making the bottom 75% pay for it. Lawyers, doctors, financiers, executives, engineers, etc don't pay off student loans cause the interest is so low, they make 5x more investing their money and paying the miniscule loan payments in perpetuity. Same reason people with millions of dollars still carry 2.85% 30 year mortgages.
 
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DeepEnigma

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Basically giving a free and clear $50,000 to the countries top 25% earners and making the bottom 75% pay for it. Lawyers, doctors, financiers, executives, engineers, etc don't pay off student loans cause the interest is so low, they make 5x more investing their money and paying the miniscule loan payments in perpetuity. Same reason people with millions of dollars still carry 2.85% 30 year mortgages.
That's right, especially the last part, even when my clients have hard money cash to buy their homes outright, they still opted for the mortgage rates or refi's all last year and into this one since it's basically "free money," when they get far more on their equity in return.
 
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Arkam

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I hope that (if this happens) the debts only get cleared for those who actually earned their degree or actively pursuing. Not a fan of bailing out slackers/quitters. I say that as someone who dropped out of university the first time (paid cash then). Had to claw my way out of the hole I put myself in and take out loans when I decided to go back to school years later. If I hadn’t gotten my degree it would have been my fault and no one but me should pay for it.

Edit: missed something. Why is the debate always about canceling the existing debt and not about preventing it for the future? Seems a bit ass backwards. It’s like freeing all the slaves but not abolishing slavery in general and allowed the next generation to live in bondage.
 
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Hari Seldon

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Basically giving a free and clear $50,000 to the countries top 25% earners and making the bottom 75% pay for it. Lawyers, doctors, financiers, executives, engineers, etc don't pay off student loans cause the interest is so low, they make 5x more investing their money and paying the miniscule loan payments in perpetuity. Same reason people with millions of dollars still carry 2.85% 30 year mortgages.

I mean it is completely insane from every single angle.

1. Prioritizes the well off over the people who could actually use it (i.e. black males who don't even graduate high school)
2. Does absolutely nothing to actually curb the costs and in fact will raise costs.
3. Incentivizes people to never ever pay off these loans going forward in the hopes that some future president will do the same thing.

You can't even defend this with any sort of logic or reason, people just want it because they want free shit off the backs of others. Scumbags.
 

dave_d

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Hey government, I got an idea:

Allow student loan debt to be discharged under bankruptcy. And get completely out of the direct lending game. Then private banks would only lend to students that will likely pay it back, bloated university budgets would have to be cut, prices would fall, college bureaucracy would starve, and universities could go back to actually preparing children for the real world.
So pretty much the reason for that originally was to get banks to do the loans in the first place. A long time ago you could discharge it but there was nothing to repossess. So you could have a situation which supposedly happened where a recent medical school grad did the math and figured he was better off declaring bankruptcy after med school than trying to pay it off. (Thanks for the free med school, I'm not going to make a lot of money as a resident and by the time I do 7 years have passed and the bankruptcy will be off my record.) So if the feds got out of the student loan business (90+ percent FWIW) and you are able to discharge them we'll be back to the way things were previously where banks don't want to do the student loan business. Admittedly by having the feds effectively guarantee them like it was before they took over the industry they were super profitable. (Something I know about first hand since I used to work at a non-profit in the student loan industry and they had to try everything they could to get rid of profit they made despite their best attempts.)
 

dave_d

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I mean it is completely insane from every single angle.

1. Prioritizes the well off over the people who could actually use it (i.e. black males who don't even graduate high school)
2. Does absolutely nothing to actually curb the costs and in fact will raise costs.
3. Incentivizes people to never ever pay off these loans going forward in the hopes that some future president will do the same thing.

You can't even defend this with any sort of logic or reason, people just want it because they want free shit off the backs of others. Scumbags.
That reminds me of when NYU med school decided to go tuition free. Most likely what will happen is more graduates will decide after graduating to not go on to be actual doctors because they don't need to worry about paying off their loans.
 

Ragnarok

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So pretty much the reason for that originally was to get banks to do the loans in the first place. A long time ago you could discharge it but there was nothing to repossess. So you could have a situation which supposedly happened where a recent medical school grad did the math and figured he was better off declaring bankruptcy after med school than trying to pay it off. (Thanks for the free med school, I'm not going to make a lot of money as a resident and by the time I do 7 years have passed and the bankruptcy will be off my record.) So if the feds got out of the student loan business (90+ percent FWIW) and you are able to discharge them we'll be back to the way things were previously where banks don't want to do the student loan business. Admittedly by having the feds effectively guarantee them like it was before they took over the industry they were super profitable. (Something I know about first hand since I used to work at a non-profit in the student loan industry and they had to try everything they could to get rid of profit they made despite their best attempts.)
I'm aware of the reasoning behind the policy, but at this point it's pretty obvious it is a horrible failure. I WANT to go back to a time where loans weren't given out like candy. It's better for everyone, except the bloated universities. And I don't want to hear about how it will hurt low income students. You know what hurts a low income student? Loading them up with tens of thousands of dollars in non-dischargeable debt for a liberal arts degree.

Your med student example would not be the typical scenario. College tuitions need to come down. University bureaucracy needs to be trimmed significantly. That's never going to happen with the feds guaranteeing loans to those unlikely to be able to pay it back. Low income students need to be able to work through their college years and pay for their education as they go. They can't do that now because colleges continue to raise tuitions 10% a year due to distorted lending practices.
 

dave_d

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I'm aware of the reasoning behind the policy, but at this point it's pretty obvious it is a horrible failure. I WANT to go back to a time where loans weren't given out like candy. It's better for everyone, except the bloated universities. And I don't want to hear about how it will hurt low income students. You know what hurts a low income student? Loading them up with tens of thousands of dollars in non-dischargeable debt for a liberal arts degree.

Your med student example would not be the typical scenario. College tuitions need to come down. University bureaucracy needs to be trimmed significantly. That's never going to happen with the feds guaranteeing loans to those unlikely to be able to pay it back. Low income students need to be able to work through their college years and pay for their education as they go. They can't do that now because colleges continue to raise tuitions 10% a year due to distorted lending practices.
Unfortunately the feds probably found out how profitable those things are with the current scheme so they probably won't give up that sweet, sweet, sweet cash that easily unfortunately.
 

Ragnarok

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Unfortunately the feds probably found out how profitable those things are with the current scheme so they probably won't give up that sweet, sweet, sweet cash that easily unfortunately.
Too true :(
 

SlimySnake

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What happens to people like me who paid off tens of thousands of dollars in loans instead of spending it on fancy cars, hookers and blow?

I also went to an instate university, did a quick 4 year degree and didnt have to pay hundreds of thousands to fancy colleges. What do i get?

They need to fix the student loans and they need to do that by limiting it to state and city run universities. No more federal loans for private education. They charge insane tuition prices. Fuck them. Also, stop all loans for bachelor of arts degrees and limit them to STEM degrees. No more federal money to draw naked college chicks or argue with your professors on whether or not Aristotle was gay.
 
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DeepEnigma

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What happens to people like me who paid off tens of thousands of dollars in loans instead of spending it on fancy cars, hookers and blow?

I also went to an instate university, did a quick 4 year degree and didnt have to pay hundreds of thousands to fancy colleges. What do i get?
You get to pay off other people’s loans with your hard earned money through taxation without representation you never agreed to.

Congrats.
 

iamblades

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lovely more socialism for the privileged middle class. As if every social program and tax incentive in existence isn't already directly targetted at them.

If intellectuals are really interested in causing a Khmer Rouge type massacre of anyone who went to college, I couldn't think of a better way than forcing a bunch of working class people(and just people who were responsible with their spending and paid it back) to foot the bill for their luxury dorms and daily starbucks while they were getting their gender studies degrees.
 

AfricanKing

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Yeah Uni should never put people in debt they can’t pay off for years. There are more sophisticated methods of having a student loan system that does not fuck over millions. Hope they do find a way of getting this passed
 

Troglodyte

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The government caused tuition prices to become astronomical (just like healthcare) and now wants to fuck every tax payer and future generations by eliminating student loan debt.

Naturally naturally.
 

MrMephistoX

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Have said it many times as a fiscal ONLY conservative (I am liberal socially) I disagree with this but I’ll happily take the free money.
 

BadBurger

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Even though I paid mine off in a little over three years I won't begrudge people getting some relief, or even having most or all cancelled in the face of this pandemic and the absurd increases in tuition rates and ancillary fees and costs year after year. It would likely be a major boon for many smaller-to-medium sized cities flooded with educated young people that can't find good jobs and are spending too much of what they earn on student loans.

1. Provide relief
2. Immediately thereafter fix the broken system

But I admit I am one of the lucky ones. Awesome job right out of college, nothing but large increases in earnings each year since. So they could increase my taxes to pay for this and I wouldn't even notice. And whatever, I'd gladly pay.
 

joe_zazen

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Even though I paid mine off in a little over three years I won't begrudge people getting some relief, or even having most or all cancelled in the face of this pandemic and the absurd increases in tuition rates and ancillary fees and costs year after year. It would likely be a major boon for many smaller-to-medium sized cities flooded with educated young people that can't find good jobs and are spending too much of what they earn on student loans.

1. Provide relief
2. Immediately thereafter fix the broken system

But I admit I am one of the lucky ones. Awesome job right out of college, nothing but large increases in earnings each year since. So they could increase my taxes to pay for this and I wouldn't even notice. And whatever, I'd gladly pay.

relief is fine, mass cancellation is fucked. why should a doctor who graduated last year get a free ride?

what they need is fair bankruptcy laws so people who tried to pay, but couldn't can start again.

btw, Biden was the guy who got student bankruptcy laws changed to help his donors back in the day.