Not to be too cynical, but I seriously doubt that the individual borrowers will be bailed out. The government will instead provide liquidity to the servicing companies so they can repackage and resell the loans. Nobody really cares about the borrowers; it's all about keeping the companies in business.

We will bail them out when enough voters vote for candidates who support zeroing out this debt, and write it off as a policy mistake.

We’ve wasted trillions on unproductive military initiatives in the Middle East, this would be relatively minor in comparison. The economic productivity realized by these debtors able to be full economic participants instead of having student loan drag for a lifetime outweighs the moral hazard.

I can see two distinct groups of people who would take issue with this, not that they'll necessarily have their way:

- people who were realistic about their finances and did not take on debt to "drag for a lifetime" in the first place. Why should the "rich" and/or reckless kids who lived in overpriced dorms with unnecessary amenities get bailed out when "I was smart and didn't screw myself from the start"?

- people who were able to afford a university education out the gate and were not burdened by any or much debt in the first place (and their parents!). Why should the "poor" and/or reckless kids who reached for something they couldn't & shouldn't have been able to afford get bailed out when "I worked hard to provide for myself / my family from the start"?

As a member of the first group, I agree with you. I really don't like the idea of subsidizing what I consider other people's bad decisions. I was able to make financially reasonable decisions, which often involved sacrifice, and chose to focus on a viable career. I don't want to spend my hard earned money supporting people who didn't do that.

I did not come from money and came from a pretty awful environment so I know this is a possible outcome for most people.

Also a member of the first group and I disagree with the conclusion. I'd be very happy to see all current student debt forgiven and subsidies to university programs improved. Good on you, though, for getting through an education without debt. That's a real accomplishment. There are for sure a good number of people who get an education for a viable career and wind up with loans that spiral out of control, especially in a country with spotty healthcare or perhaps because they exited school during the Great Recession and got stuck in intern-hell. Point being, there's a good number of folks with student loan debt they can't easily manage who made all the right decisions but got a bad break somewhere. Also, this doesn't even consider people who do civically valuable work but having extremely low earning potential.

Are there some people who took out great quantities of loans with no concern for their future? Absolutely. Should such people be hounded by this lack of foresight at the age of 19 into their old age? I'd argue no. Even if you can't find sympathy for the indebted, I'd also argue that very few societies in history have managed to stay cohesive with a large, indebted underclass, let alone prosperous and achieving their potential.

Actually, I don't have a degree. That's sort of my point. It's very possible to just enter the labor market and make money if you work hard and smart. I'm a developer but I know plenty of people I grew up with who went on to be: military people, plumbers, cops...

> there's a good number of folks with student loan debt they can't easily manage who made all the right decisions but got a bad break somewhere.

I don't think it's ever the right decision to take out a massive amount of debt. Even to study something you love. You can't fight against the real world economics of that decision. I saw the option to get what I considered to be a lifetime's worth of debt and looked for alternatives. Lots of people who come from lower class backgrounds do the same.

I think it's going to be very hard to get those people on board with paying off other people's student debt.

What makes the student debt such a crappy situation is the fact that we're dealing with young people and families who may not necessarily have all the information to do an educated cost/benefit analysis. Students are pressured from very early on to plan to go to college. Teachers, guidance counselors, administrators, and often parents all fall into the narrative of "yes, college is a good decision and will pay for itself". It is completely taboo to tell a student that there are other options because that can be construed as telling the student they have less potential than others.

right but if someone like that came to you and asked for 200k in loans you’d laugh in their face. But now instead the govt decided to back student loans and these people got them like candy

I think we should also consider the pressures and advertising from all sides that pushed many kids into taking loans of quantities they didn't truly comprehend with potential consequences that weren't all that well explained to them. We know advertising works great on young people and when someone comes and tells them "Come here, you will make $120K a year out of college, you are the perfect candidate! You can pay off your loans in 2-3 years if you want and still have tons of money!" And then everyone around them jumps on board "OMG thats so great! Of course you need to jump on that now!", but then in reality it is a completely unprepared student with no idea what they are getting into, middling grades at best, signing their name over on documents that can barely decipher, to get a degree in either something incredibly hard or incredibly useless.

We know advertising works well and makes people do and buy shit they don't need or want, and in this case it was primarily targeted at kids during and immediately after highschool who are especially vulnerable.

> Actually, I don't have a degree. That's sort of my point.

Apologies, you didn't state that and I assumed.

> It's very possible to just enter the labor market and make money if you work hard and smart. I'm a developer but I know plenty of people I grew up with who went on to be: military people, plumbers, cops...

Then again, it's also not. Some fields absolutely require credentials and long-term education and we, as a society, need those jobs to be filled: social work, doctoring, teaching, plant management, accounting, licensed engineering etc. Some of these jobs have high potential -- medicine, if you choose the right sub-field -- and others not so much. In fact, the reason why we have a shortage of GPs in the US is a result of medical students looking at their debt burden and deciding they need to move into cosmetics or other high-paid fields. This strikes me as bass ackwards.

> I don't think it's ever the right decision to take out a massive amount of debt. Even to study something you love. You can't fight against the real world economics of that decision.

Well, the consequence of this stance is that only the rich will ever be credentialed, or the rich and the fortunate. Societies in which this is the rule haven't tended to fare well over the long-term.

> I saw the option to get what I considered to be a lifetime's worth of debt and looked for alternatives. Lots of people who come from lower class backgrounds do the same.

Well, good on you; that's quite an accomplishment. It used to be the case that people from lower class backgrounds, in the US, could go get an education without taking on debt loads, gambling that they'd be able to pay it off once their salaries kicked in. We, as a nation, used to subsidize schools and apprentice programs. My argument, essentially, is that 40 years ago we chose to make schools subject to market forces and this has been one of the main movers of rising inequality in the population and we have proof that it doesn't have to be this way from prior experience. We should consider this a failed policy experiment and reverse course in the most direct manner possible.

An individual can only swim so hard against the tide. Even if some do happen to make it to shore that doesn't mean there's no tide.

> I think it's going to be very hard to get those people on board with paying off other people's student debt.

Which people, sorry?

I actually agree with you. We need to rethink how education works and is funded. I also think education is valuable and needed in lots of fields.

I just don't think we should excuse people's existing debt. We should look to fix things in the future. Some of that is the realization that there's value to be created outside of credentialed fields. Some of that is also probably the removal of credentials as a requirement for many fields as well.

> I actually agree with you. We need to rethink how education works and is funded. I also think education is valuable and needed in lots of fields. > > I just don't think we should excuse people's existing debt. We should look to fix things in the future.

Ah, okay, there's the difference. I tend to think that solutions to issues that don't address defects in the present moment are partial at best. Maybe, also, I don't imagine that most people with student debt were profligate, and, even of those that were, I don't think they ought to be held to account in perpetuity for that, especially if we end up settling on the notion that the root cause was a failure to properly value education as a society.

It would be easier to get the public to agree to this once the root cause is corrected. Getting loan forgiveness while continuing to issue loans that too often end up in default status is going to be a difficult sell. Writing off as a policy mistake might be possible but only if the policy mistake is corrected first or simultaneously.

the only way i’d support that is if the government gets out of the loan game and if we get rid of the provisions that prevent people from filing bankruptcy on the loans.

Yes, I would agree with this, along with government providing for free community college as well as subsidizing trade schools.

Fresh slate and we start over as a country on the right foot for education delivery.

I am a fiscal conservative, but I absolutely can get behind the free community college idea. It would be a net gain for the economy in my opinion as we could significantly reduce student loans to strictly means-tested criteria.

There's also a lot of jobs that don't really need degrees, either. One of the main ones I'm thinking of is teachers. Anyone can learn to teach, and an apprenticeship program might be better at actually getting good teachers (plus, it would let them see a few years in the classroom, meaning that they can decide if it's for them early on, and then leave before they start, hopefully decreasing teacher turnover rate). Then you could add specialization at all levels for subject area, and so they do their apprenticeship in the area they want to teach. Oh, and stop elementary school teachers from being generalists while we're at it; that's where a lot of the problem with basic math ability lies, from my experience as a high school math teacher. These teachers honestly have to take the state-mandated tests multiple times because of basic high school level math, yet we expect them to teach kids well...

In California, community college is $46/unit. Typical full time enrollment is 12-15 units. And low income individuals get that fully covered. They are in the process of making the first year of community college fully subsidized for all residents.

Won't it backfire in some way ? Banks and house sellers rising their prices because these debt free people now can get better credit ?

If the system provides easy access to cash backed by the US government without disambiguating loan candidates from those who are high risk vs lower risk, how is greed not a factor?

capitalism is built on greed. it’s like a simple AI with an optimization function for money. the problem is when the govt steps in and aligns incentives such that the greedy/profitable thing to do is to saddle people with debt because its zero risk for the lender

Who are be baling out? The middlemen?

Aren't these loans almost all government backed? Meaning if the loan defaults the government pays the creditor?

Not all of them, but a good chunk of them are. A lot of student debt is sold to big banks without the students every really knowing. Banks then package them together and sell them again, allowing themselves to make even more loans. The same people that tanked the economy in 2007-2008, and then got bailed out by the taxpayer, are now the primary debt holders of many student loans. The difference is that people with student loans have no way out. We punish those trying to educate themselves and reward those who exploited uninformed borrowers.

> Meaning if the loan defaults the government pays the creditor?

Yes. And therein lies the problem insofar as I'm aware, because you then owe the money to the US government and you cannot declare bankruptcy on the US government. You can escape paying a ludicrous mortgage or car loan or what have you by declaring bankruptcy. You cannot do the same with the US government, which will garner your wages for all you're worth for the rest of your life if you don't pay back your student loan.

Too educated to fail. :-)

cancel the debt, and move towards free colleges.

Not unless the budgets of these schools are brought under control first. A pipeline of seemingly free money is at least partially responsible for creating the current mess. Making it "free" with no restriction on how much will be spent on "free" is going to lead to even more runaway growth in the cost of providing education.

They could easily set a limit based on headcount, similar to public schools. The only problem I see with that is people purposefully defunding the system and turning it into a bigger bureaucratic hell like many public schools have become.

I paid off my student loans. If people who didn't pay off their loans get forgiveness, I should be entitled to a refund.

Can I add my mortgage debt to this please? I want in on the free stuff too!

Now sure why you are downvoted. This is by far the best option.

yeah, weird right?