Student loan forgiveness helps the privileged

Occupy Wall Streeters want forgiveness for college loans. That would help the privileged at the expense of average taxpayers, say economists.

Also on Community College Spotlight: Low-income college students are borrowing to pay living expenses and “maximizing their debt,” say Michigan college officials. That’s a high-risk strategy for high-risk students.

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Comments

  1. The protestors seem like clueless idiots to me. If you “forgive” all that debt, you’re effectively saying, “no one ever gets to take out college loans again.” No creditor, after being burned by this, would ever lend again. The result: only rich people get to go to college – the opposite of what they seem to be protesting for.

    Even worse, other banks might very well think, “if the government can just declare forgiveness on debts, we should probably quit lending.”

    I don’t know any of the protestors personally, but they come across in the media as hopelessly coddled, ignorant and self-centered boneheads. It’s easy to see why so many of them are unemployed, I certainly wouldn’t hire them.

    • Indeed, a huge amount of student debt isn’t held by globo-banks or Sallie Mae, but by credit unions and mom-and-pop or midsize banks. “Forgiving” student loans either destroys those institutions’ balance sheets, or it destroys the taxpayers who have to make them whole. You can’t just make a trillion dollars disappear.

      I can’t be quite as judgmental about those who are asking for loan forgiveness, though. It was a great idea to complete a college degree at any cost until it wasn’t, and an awfully low bar for loan forgiveness/bailout requests was set when AIG and its counterparties were made whole.

      • Well, I agree that the value of a college education has diminished a bit, I did hear a pretty relevant comment about the protestors:

        “Wanna bet there aren’t any petroleum engineers in that bunch?”

        Part of the lessening of the value of a college education was when we started allowing degrees in nebulous concepts rather than disciplines.

    • banks might very well think, “if the government can just declare forgiveness on debts, we should probably quit lending.”

      In other words, students in tracks which don’t lead to jobs able to repay the loans, probably shouldn’t get loans.

      WTF took us so long to realize this?

    • Roger Sweeny says:

      I suspect many of the protestors think the loans should come from the government, which should loan to anyone and not worry about repayment.

      Better than that, college should be free to the student, like high school.

      After all, if everyone should go to college, shouldn’t “society” pay for it?

      I actually find the logic kind of compelling. I just don’t think most people should go to college.