Debt forgiveness is a horrible policy. It encourages borrowers to hold on to their debt as long as possible to achieve forgiveness, and punishes those who don't.

My wife and I worked our butts off to pay off our student debt 10+ years early. How is it fair that our peers with the same jobs, who didn't scrimp and save, will achieve the same outcome we did if the government just decides to take all of that personal debt and basically just add it to the national debt (or expand the money supply)?

Beyond that, when the government does that, OUR taxes will be going to pay off our FRIENDS' debt (or we'll be paying via inflation), even though we ourselves worked to pay off our own debt early. This is grossly unfair.

So because it was hard for you, it should be hard for everyone else. They should all have to suffer just like you did to pay off their debt?

That's not at all what he's saying. He's saying that this creates the incentive of not working hard at all, let's just wait until the government bails us out. Yeah, lets create a society where nobody has to work and we just all magically have it easy!

Exactly, no one is too big to fail, and the largest recipients of federal bailout and stimulus money, industries like banking and finance, shouldn't just get windfalls whenever they fail to plan ahead.

It isn't a question of suffering; if they can pay the loan back without suffering then everyone is a winner. Horrible policy is when the government sees people who work hard, save responsibly and honour their commitments ... and then that government puts a thumb on the scale to make sure the responsible got worse outcomes than free-spending fools.

Presumably we all want those free-spending fools to live without suffering (I certainly do). They should have food, shelter and freedom to improve themselves. If they can't pay the money back then it is stupid to pretend they will (and politically destabilising). But all this doesn't outshine the fact that people who paid off their student debts the hard way made better choices and probably worked harder to boot.

Sometimes the rules need to change midway through the game of life, but the government shouldn't be monkeying around with the score at the same time. The people who borrowed money and couldn't pay it back made terrible choices. People who made good choices should be rewarded more than people who make bad choices and given first pick of resources and opportunity. Otherwise people who make bad choices will end up owning stuff they'll muck up and in positions of authority where they will muck stuff up that they don't own.

Now that is mean to the people who took out loans. Bad luck. If they want a nicer tone they can cover their own costs. It isn't reasonable to take someone else's money, government rolls in and hand-waves paying it back (probably has the tax payer cover the costs in some complicated bailout, who knows) and then expect everyone to be treated like they are behaving responsibly and respectably. There has to be some level of recognition the magnitude of the mess-up here. People are making life-shatteringly bad decisions and dragging other people with them. That needs more consideration than wiping the slate clean and shrugging hard.

But obviously the usual bankruptcy process (they've got nothing and basically start from scratch) would be fine. If they're broke they're broke.

> Beyond that, when the government does that, OUR taxes will be going to pay off our FRIENDS' debt (or we'll be paying via inflation), even though we ourselves worked to pay off our own debt early. This is grossly unfair.

So you basically think that people who were defrauded should have an debt-albatross hanging over their necks (potentially for their whole lives), so you won't feel like a sucker for paying of your own student debt?

Were you defrauded by the school whose loans you worked so hard to pay off?

First, I was responding to your comment that debt relief was a good policy generally. It's not.

Second, what about all of the other victims of crime. Are people who were defrauded by a private school more worthy of relief than carjacking victims? Arson victims? What about victims of other frauds?

What about non-monetary crimes? Are people who were defrauded by private schools more worthy of relief than rape victims, or the families of murder victims?

It's just not a role of government to provide monetary relief (as opposed to justice) to victims of crime. And even if it were, I see no reason why victims of private school fraud should receive relief before all others.

> Are people who were defrauded by a private school more worthy of relief than carjacking victims? Arson victims? What about victims of other frauds?

Mortgage and car loan issuers always force you to purchase adequate insurance. If you are a victim of arson or carjacking, you won't still owe the lender the full amount of the loan—insurance will make both you and the lender whole. There is no insurance for education though. So someone has to lose money here. The question is, is it better for the student to be out of the money or the lender.

> Were you defrauded by the school whose loans you worked so hard to pay off?

Seems like you moved the goalpost here. Do you think debt forgiveness is a bad policy when it comes to people who were not defrauded?

What about people who had to pay 2x-10x for same degree simply bc they were some born later? That is grossly unfair but so what?

In bankruptcy the lender already factored in that possibility when creating the loan, and the Government and taxpayers aren’t left holding the bag.

My wife took private student loans, which at the time were forgivable in bankruptcy, as a hedge against future financial issues. She accepted a higher interest rate to account for that.

… then the federal government retroactively made them non-dischargeable.

I mention this to highlight that changes in the regulatory environment don’t always favor the borrower, nor are there always concessions made to limit harm to the injured party.

That's also a great example of how discharge-ability and the potential for student loan forgiveness warps the actions of borrowers, and in an unfair way.

How is it unfair if the loan came with higher interest rates to account for that?

That’s exactly the point of how debt markets are supposed to work. Higher risk borrowers are more likely to default, so pay higher interest rates to cover the % that do. If as a borrower you’re willing to pay more for your debt to give you that option (and quite frankly, all debt should be this way. There’s no debt an LLC can’t write off, why is there debt individuals can’t write off?), why is this bad?

One "unfair" thing is generally when there's a mass "loan forgiveness" program (like there was for Mortgage Debt in 2008) borrowers are exempted from considering forgiven debt as income. That's unfair to the rest of us taxpayers.