Student loans

https://www.nber.org/papers/w30404#fromrss

Estimates reveal that growing endowments generate large and persistent increases in spending overall and for instruction, student services, and administration in particular. However, wealthier colleges and universities do not increase the number of students they serve or the fraction of students receiving aid, and only modestly increase the generosity of aid packages. Instead, these institutions offset higher freshman yield rates by becoming more selective and enrolling fewer low-income students and students of color. Overall, colleges and universities appear to use greater endowment wealth to increase spending and to become more selective, resulting in higher institutional rankings, but do not increase the size or diversity of their student bodies. The results are important in light of the preferential tax treatment of endowments and interest in increasing access to elite postsecondary education for underserved populations.


 
https://www.wsj.com/articles/student-loans-and-the-national-debt-higher-education-graduates-college-university-reform-government-biden-relief-cancellation-11662061187?mod=opinion_lead_pos5

The scheme’s flaws have been well chronicled. It’s regressive, rewarding the well-to-do at the expense of the less fortunate. It’s grossly unfair to those who repaid what they borrowed or never went to college. It’s grotesquely expensive, adding hundreds of billions to a federal debt that already threatens our safety-net programs and national security. Like so much of what government does, it’s iatrogenic, inflating college costs as schools continue to pocket the subsidies Uncle Sam showers on them. And it’s profanely contemptuous of the Constitution, which authorizes only Congress to spend money.

When the federal government took over the loan program in 2010, President Obama claimed it would turn a profit of $68 billion and that “we are finally undertaking meaningful reform in our higher education system.” Credit where due: a dead loss of hundreds of billions of dollars and tuition costs that continued to soar can fairly be described as “meaningful.”


 
Don't worry the plan is for it to get struck down in court and then they can blame the GOP and supreme court for hurting people
 
acesfull86 said:
https://www.wsj.com/articles/student-loans-and-the-national-debt-higher-education-graduates-college-university-reform-government-biden-relief-cancellation-11662061187?mod=opinion_lead_pos5

The scheme’s flaws have been well chronicled. It’s regressive, rewarding the well-to-do at the expense of the less fortunate. It’s grossly unfair to those who repaid what they borrowed or never went to college. It’s grotesquely expensive, adding hundreds of billions to a federal debt that already threatens our safety-net programs and national security. Like so much of what government does, it’s iatrogenic, inflating college costs as schools continue to pocket the subsidies Uncle Sam showers on them. And it’s profanely contemptuous of the Constitution, which authorizes only Congress to spend money.

When the federal government took over the loan program in 2010, President Obama claimed it would turn a profit of $68 billion and that “we are finally undertaking meaningful reform in our higher education system.” Credit where due: a dead loss of hundreds of billions of dollars and tuition costs that continued to soar can fairly be described as “meaningful.”
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I don’t think I realized how bad that turned out. Thanks for posting
 
090122CatoStudentDebtPoll-768x770.jpg


Turns out stuff is popular when you only consider the benefits and ignore the costs. It’s depressing how many voters are unable to scratch a millimeter below the surface and weigh obvious consequences of a policy.
 
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https://budgetmodel.wharton.upenn.edu/issues/2022/8/26/biden-student-loan-forgiveness

Summary: President Biden’s new student loan forgiveness plan includes three major components. We estimate that debt cancellation alone will cost up to $519 billion, with about 75% of the benefit accruing to households making $88,000 or less. Loan forbearance will cost another $16 billion. The new income-driven repayment (IDR) program would cost another $70 billion, increasing the total plan cost to $605 billion under strict “static” assumptions. However, depending on future IDR program details to be released and potential behavioral (i.e., “non-static”) changes, total plan costs could exceed $1 trillion.


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Bet the over
 
acesfull86 said:
https://budgetmodel.wharton.upenn.edu/issues/2022/8/26/biden-student-loan-forgiveness

Summary: President Biden’s new student loan forgiveness plan includes three major components. We estimate that debt cancellation alone will cost up to $519 billion, with about 75% of the benefit accruing to households making $88,000 or less. Loan forbearance will cost another $16 billion. The new income-driven repayment (IDR) program would cost another $70 billion, increasing the total plan cost to $605 billion under strict “static” assumptions. However, depending on future IDR program details to be released and potential behavioral (i.e., “non-static”) changes, total plan costs could exceed $1 trillion.


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Bet the over
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Can you imagine being a hard working middle class family where the breadwinner didn't go to college and learned a trade. Get **** on by the establishment every single day for being an uneducated rube and then having to help bail out the 'educated' people because their piece of paper they got was worthless and cost them tens of thousands of dollars they didn't have to obtain?

If this goes through there will be MASSIVE repercussions and the establishment will not like it.
 
acesfull86 said:
https://budgetmodel.wharton.upenn.edu/issues/2022/8/26/biden-student-loan-forgiveness

Summary: President Biden’s new student loan forgiveness plan includes three major components. We estimate that debt cancellation alone will cost up to $519 billion, with about 75% of the benefit accruing to households making $88,000 or less. Loan forbearance will cost another $16 billion. The new income-driven repayment (IDR) program would cost another $70 billion, increasing the total plan cost to $605 billion under strict “static” assumptions. However, depending on future IDR program details to be released and potential behavioral (i.e., “non-static”) changes, total plan costs could exceed $1 trillion.


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Bet the over
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Those “non static changes” are the ones I’m most concerned with. It’s one thing to foot a large bill. I have no confidence these knuckleheads have given anything beyond a cursory look at the unintended consequences of destroying an incentive system.
 
https://www.businessinsider.com/biden-student-loan-debt-forgiveness-serious-ethics-violation-foxx-comer-2022-9

Since Biden announced the debt relief, Republicans have been on the offense, pursuing many routes to attempt to prevent the loan forgiveness from coming to fruition. Along with requesting oversight on the policy, some lawmakers, including Foxx and Sen. Ted Cruz, have expressed intent to pursue lawsuits that could overturn the policy — even as the White House maintains it has the legal authority to implement broad relief under the HEROES Act of 2003, which allows modification of student-loan balances in connection with a national emergency, like COVID-19.
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If this ridiculous bailout ends up not being challenged in court (or worse, survives a challenge), this really needs to be highlighted as a perfect example of the unintended consequences of government action. "Can you believe [insert (R), usually Rand Paul] voted against [insert well-meaning legislation, typically geared towards veterans or seniors]? How could someone be so heartless?" This, this is how and why! Because years down the road, what was once a well-intentioned, narrow piece of legislation can be used to justify a trillion dollar vote buying handout.
 
https://reason.com/2022/09/19/biden-inadvertently-declares-his-student-loan-forgiveness-program-illegal/

What, exactly, gave the president authority to unilaterally cancel student debt?

The answer, it turned out, was the pandemic. As Reason's Damon Root wrote in August, when Biden announced his debt cancellation plan last month, administration lawyers cited the Higher Education Relief Opportunities for Students, or HEROES Act, of 2003, a post 9/11 law that "permits the Secretary of Education to waive or modify Federal student financial assistance program requirements to help students and their families or academic institutions affected by a war, other military operation, or national emergency."

The law was clearly intended as a vehicle to give the president the power to forgive student loan debt for individuals directly involved in fighting the war on terror. But in Biden's revisionist citation, it became an all-purpose tool for mass debt forgiveness via executive action, premised on the argument that the COVID-19 pandemic was an ongoing national emergency.

The pandemic, in this formulation, gave Biden extraordinary powers—powers that under normal circumstances the president would not have.

It was an inherently dubious justification, given the novel and expansive reading of the HEROES Act. But Biden completely undercut it on a 60 Minutes interview this weekend when he declared, flatly, that "the pandemic is over."

If the pandemic is over, then there is no ongoing national emergency, which means that the already shaky legal ground on which the Biden administration based its action has now collapsed entirely.
 
Trump managed to resist taking unprecedented powers during Covid.

Unfortunately, his successor is a full blown tyrant who has made himself king
 
https://betonit.substack.com/p/safety-in-numbers-why-student-loan

What is to be done? Let me start by unhelpfully pointing out that the student loan suspension was outrageous from the get-go. The federal government was handing out massive piles of free money to ensure that meeting your pre-Covid financial obligations was easy. Once the government does that, going on to declare that you don’t have to meet your pre-Covid financial obligations was a travesty from almost any point of view.

Yes yes, but what is to be done now?

First and foremost, this is a perfect time to end government-supported student loans forever. To say, “We thought we could avoid the slippery slope from subsidized loans to free college for all. We were utterly wrong, so we’re killing the program.” At minimum, this is a great time to drastically raise the interest rate to compensate taxpayers for much higher repayment risk going forward.

Second, we clearly need harsh enforcement, ideally backed by new draconian punishments. This won’t just directly encourage individuals to resume repayments. It will help us surmount the “safety in numbers” problem. Without some eye-bugging public examples of the consequences of default, innocent taxpayers will be left holding a bag with almost $2 trillion in student debt.

Unfair? Give me a break. Due to the suspension of all interest payments plus massive inflation, the real value of student debt has already fallen 13% since March. Borrowers have been getting an insanely great deal. It’s high time for this madness to stop.


 
sturg33 said:
Trump managed to resist taking unprecedented powers during Covid.

Unfortunately, his successor is a full blown tyrant who has made himself king
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If everything they said about Trump was true he would have grabbed that opportunity by the horns to cancel elections and override the other two branches of government.
 
https://reason.com/2022/09/27/biden-student-loan-forgiveness-lawsuit-pacific-legal-foundation/

President Joe Biden's plan to forgive hundreds of billions of dollars in student loan debt violates both federal law and the Constitution, according to a just-filed lawsuit from the Pacific Legal Foundation (PLF), a libertarian law firm.

"This isn't how laws are supposed to be made," Caleb Kruckenberg, an attorney for PLF, tells Reason. "Only Congress has the power to pass laws and spend money under the Constitution. The administration's actions here are flagrantly illegal."

This is the first serious challenge to Biden's student loan forgiveness plan, which he announced last month. The lawsuit's plaintiff is Frank Garrison, who's also an attorney at PLF. Garrison borrowed federal student loans to pay for law school, but according to him, Biden's debt forgiveness plan will actually subject him to a financial penalty in the form of a state tax. This gives him standing to sue the U.S. Education Department, his lawsuit argues.

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Importantly, debt relief under PSLF is not subject to state taxes. Biden's broad forgiveness plan, however, will be taxed as income in Indiana—where Garrison resides—as well as Wisconsin, North Carolina, Minnesota, Mississippi, and Arkansas. Garrison will be "stuck with a tax bill that makes him financially worse off than continuing with his repayment program under PSLF," according to the lawsuit. "He did not ask for cancellation, doesn't want it, and has no way to opt out of it."


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Maybe we’ve found our plaintiff…
 
acesfull86 said:
https://reason.com/2022/09/27/biden-student-loan-forgiveness-lawsuit-pacific-legal-foundation/

President Joe Biden's plan to forgive hundreds of billions of dollars in student loan debt violates both federal law and the Constitution, according to a just-filed lawsuit from the Pacific Legal Foundation (PLF), a libertarian law firm.

"This isn't how laws are supposed to be made," Caleb Kruckenberg, an attorney for PLF, tells Reason. "Only Congress has the power to pass laws and spend money under the Constitution. The administration's actions here are flagrantly illegal."

This is the first serious challenge to Biden's student loan forgiveness plan, which he announced last month. The lawsuit's plaintiff is Frank Garrison, who's also an attorney at PLF. Garrison borrowed federal student loans to pay for law school, but according to him, Biden's debt forgiveness plan will actually subject him to a financial penalty in the form of a state tax. This gives him standing to sue the U.S. Education Department, his lawsuit argues.

…

Importantly, debt relief under PSLF is not subject to state taxes. Biden's broad forgiveness plan, however, will be taxed as income in Indiana—where Garrison resides—as well as Wisconsin, North Carolina, Minnesota, Mississippi, and Arkansas. Garrison will be "stuck with a tax bill that makes him financially worse off than continuing with his repayment program under PSLF," according to the lawsuit. "He did not ask for cancellation, doesn't want it, and has no way to opt out of it."


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Maybe we’ve found our plaintiff…
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Thought you had to fill out the application in October
 
msstate7 said:
Thought you had to fill out the application in October
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I think a few million borrowers do not have to fill out an application and are automatically enrolled - might be people who are already on an income driven repayment scheme so the federal government already has their information on file.
 
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