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Jason Munshi-South's avatar

I'm a lifelong academic that didn't pay off my student loans until I was 40, although they were modest, not crushing, and ultimately worth it. I'm in favor of canceling some student debt, but would add a few things that should be accounted for if Biden does this:

1) The people most harmed by their student debt are those that racked up some debt without graduating. They should be prioritized. The loan amounts will generally be smaller (say, $10K-20K) to forgive and the effect will be greatest. We have sold the idea that everyone should go to college, and there are a bunch of people that get swept up in that idea that weren't prepared for college, had too many adverse life situations to succeed, etc.

2) Larger amounts of loan forgiveness should be offered to those that are willing to do jobs we need, e.g. K-12 teaching in public schools, nurses, etc.

3) For political and social reasons, I think student loan forgiveness should be accompanied with an offer of free community college or trade school for anyone that wants it.

4) Universities, especially private universities, have profited handsomely off of the current student loan system. As student debt has piled up, universities have massively expanded the ranks of administrators and created a self-perpetuating bureaucracy that does little of value. Simultaneously, university administrators have systematically under-invested in instruction and turned teaching at the university level into part of the gig economy. A majority of university courses are now taught by temporary, insecure, underpaid labor.

Student debt relief should be accompanied by measures to reform this situation. For example, some government-backed student loans could only be available to students that attend universities where the ratio of money spent on education / research vs administration meets a certain threshold.

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Nude Africa Forum Moderator's avatar

I don't know, I think Matt's suggestions have a bit of Brookings-brain going on. Each individual carveout and exception makes sense and probably polls well but too much of it and you have a partial non-refundible tax credit for qualifying child care expenditures incurred in an economically distressed zip code, with a phase in and phase out. No layperson will understand the thing as a whole.

My preferred loan forgiveness plan would be to focus on interest. Set the interest rate on all federal student loans to zero. But do it retrospectively, too: treat all past payments as payments toward the principal and forgive any portion of someone's debt load attributable to interest.*

This would result in a lot of people having the entirety of their debts forgiven (think of the sob stories of debtors who borrowed $15k, have paid back $20k, and still owe $15k). It alleviates a lot of the sensation of a creeping, looming debt load that I think causes a lot of dissatisfaction. But importantly, it's not as readily susceptible to criticism that it's an unfair handout for elites. Everyone pays back every cent of what they borrowed, but the government doesn't make any money off of them. Some people who already paid off their student loans maybe feel a little bitter, but not nearly to the same degree as full-scale debt forgiveness. And you can say it in a sentence: Biden got rid of past, present, and future interest on student loans. But I think it'd be nice to do a blanket $10k (or more, why not, right?) too; it doesn't have to be an either/or.

*I have not researched the statutory authority here but if debt can be forgiven straight up and Trump can suspend interest unilaterally I anticipate that approach this would be lawful.

Disclosures: am lawyer married to doctor, total debt burden presently exceeds half a mil. So I didn't love the professional school carve out ;)

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