Nick Gillespie on Freedom Watch Tonite, Talking Student Loan Debt & Other Possible Bailouts

I'll be on Fox Business' Freedom Watch with Judge Napolitano tonight, talking about Occupy Wall Street and many protesters' demands that student loans be written down or forgiven altogether.

The show airs on Fox Business at 8pm ET. 

Last year, people took out over $100 billion in student loans according to USA Today, and the cumulative total of all student loans is expected to reach more than a $1 trillion by the end of this year.

Should student loan debt be forgiven, as many Occupy Wall Street folks want? That's what the judge and I will be talking about, along with other bailout programs pushed by President Obama and his predecessor.

I was on Freedom Watch a few weeks back, talking about Obama's jobs programs. Take a look:

Comments

[Old Mexican]

Should student loan debt be forgiven, as many Occupy Wall Street folks want?

YES, so we can have even more freeloaders sign up for free classes and beer guzzling contests!

[yonemoto]

Why should student loans be any different than any other type of loan.

Student loans should DEFINITELY be forgiven, *if* you declare bankruptcy.

[cynical]

In the future, sure, but the availability and interest on student loans were based on their secure legal status.

[bendover]

Great business plan - let's loan money to students, to get a $100k education and just hope....hope that once they graduate (having no real assets to speak of) that they don't declare bankruptcy right then - and thereby shed themselves of a $100k of indebtedness.

[goneGalt]

Banks need to price in the risk. If that raises rates to an unafforable level, then there is no market and no business case for the existence of the loans.

Students and parents will need to work and save for college. Colleges will need to provide degrees at a cost the market can bear.

BTW, today's graduates do have one asset. The degree. Revoke it if discharging the student loans in bankruptcy..

[NAL]

Good TV. Thanks, Nick.

[Zombie Jimbo]

Should student loan debt be forgiven, as many Occupy Wall Street folks want?

Only if the universities that provided the "education" eat a big piece of the cramdown.

[wareagle]

maybe Nick can ask the question no one has asked: why does tuition go up year after year, often by double digits, and no one says a word about that? No other industry could get away with raising its prices that way.

[poetry]

Distortions in the market caused by third-party payment, right?

It's just like the healthcare industry, except instead of insurance distorting costs ($800 for a simple consultation? Sure! Insurance is paying!), it's scholarships ($42,000 a year for an English degree? Sure! The state is paying!).

I don't see why this is hard to understand.

[wareagle]

but unlike health care, NO ONE ever questions rising tuition.

[Pro Libertate]

Why does it cost 6-7 times more to get an education at my state university than it did when I attended it a little over twenty years ago? Inflation would account for what, about a doubling of the tuition? Do they teach the classes with superintelligent AI or aliens? What increase in value is there in today's education?

[k2000k]

It's the fourteenth edition on the literary greats from the 13 century. They switched to glossy paper.

[EscapedWestOfTheBigMuddy]

Ask to have a look around the student recreation complex.

Check out the titles, salaries and number of reports given to the administrators in charge of whatever they call the diversity department. And the disabilities support entity (to be sure some of this comes trying to comply with the ADA).

There will be a few other outrages too, but just which ones depends on what little state school you went to.

[T]

Plenty of people question it, but nobody does much about it. Why should they? The money spigot will adjust.

[Federal Dog]

"Only if the universities that provided the "education" eat a big piece of the cramdown."

Only if they eat it all.

I have twenty-two years of university teaching experience, and you cannot even imagine the open fraud that has replaced teaching.

[k2000k]

Care to elaborate? As a former student I can tell you the bullshit I saw. But it would be interesting to get the observations from someone who has been on the otherside of lecturn.

[poetry]

I have friends making $70,000 a year who still have no savings because of their debt.

I feel badly for them, emotionally, but rationally, I question their judgment (at least, the judgment of their twenty-year-old selves, or whenever they took on these loans). I make less than half that, but have a decent savings put away now.

Education is an investment. One should not leverage investments.

[NAL]

So true. Incidentally, I have friends who make $220K per year, but they had to take out a loan to add a $4000 shed to their back yard because their credit cards were all max'd out. It's incredible how stupid some people are with money.

[NAL]

...and I should add that this is not a high-cost-of-living area. You can get a decent 2000 sq. ft. home for $250K or so (admittedly, that's not cheap, but it's not Silicon Valley or Manhattan either).

[k2000k]

Reall a simple finance class in highschool would work wonders. People just do not look at money they way they should. It's funny, they learn about opportunity cost AFTER they took out that 40k, 60k, or 80k loan to go to a university.

[CE]

Actually, if an investment is a good bet, you should leverage it, exchanging present (and near term future) pain for long-term future gain. It's consumption (cars, clothes, vacations, etc.) that should never be financed.

[Red Rocks Rockin]

Actually, if an investment is a good bet, you should leverage it, exchanging present (and near term future) pain for long-term future gain.

The problem is that because these debts are non-dischargeable in bankruptcy, the government, the banks, and the schools never have to feel the effects of the loanee defaulting. Right now, the leverage risk only goes in one direction.

[wareagle]

I'll repeat because it bears is: why does tuition go up every year without so much as a whimper about it? Tell me how well your businesses would fare if you raised prices annually, often by 10% or more.

[Crickets Dont Care]

[Students and Their Parents]

Well, shoot, I'm not paying for it, so what do I care?

[The Economy]

I'm paying for it, but I'm a theoretical construct, and therefore don't really have the communicative mechanics to complain.

[wareagle]

of course, you care; you just choose to bitch about the size of the loan instead of questioning the size of the original tuition bill.

[angrier NAL]

Government grants and loans. When I graduated with a PhD 16 years ago, it was common knowledge that if you go into academia (as opposed to industry), you'll take a salary hit, but you get more freedom/time for creativity/research (i.e. a trade off). Now, according to the latest statistics I saw, there is virtually no difference between academia and industry. Student loans and Pell grants are simply shunts from the government to academia.

[Old Mexican]

Re: wareagle,

why does tuition go up every year without so much as a whimper about it?

There's always someone whimpering about it every year but is simply overwhelmed by the noise about how a college education will automatically give you a million dollar increase in your life's income, or something.

[Beloved Rev. Blue Moon]

Do you have a suggestion, wareagle?

[angrier NAL]

Student loan debt should NOT be forgiven. The moral hazard of that is huge.

I purposely went to a "cheap" school and worked so I didn't have to have student loan debt, and my degree is in chemistry (which has actual societal value). Now, these moonbats with their liberal arts degrees from The College of Hoity Toity want their six-figure loans forgiven?!!! They can suck it!

[poetry]

Agreed.

..And I worked for the college I went to, and o boy o boy is there ever BULLSHIT that they pooouuuurrrrr money into..

(Incidentally, I got an English degree, but I paid for it because I knew I was good at it, and I wanted it. And now I'm an editor.)

[Pro Libertate]

I've worked my ass off to pay back my student loans.

[Metazoan]

End nondischargeability of student loans and government support thereof.

[Pablo]

+1 treat student loans like any other debt. And eliminate the government guarantees. Do both of these and banks will not make loans which are unlikely to be repaid. And watch education prices sink like a brick thrown into the ocean.

[Gray Ghost]

Had something longer written higher in the thread, but Pablo and Metazoan have made my points for me. Scrapping BAPCPA wouldn't be a bad addition though.

[romulus augustus]

Question: were the TARP loans to banks forgiven? I understand the bulk have already been repaid with a nice interest charge to boot. So maybe the gov should re-structure the student loans by lengthening the terms in exchange for higher interest?

[Lib Logic]

Yeah, but since most of these loans are guaranteed by The State, and since The State is illegitimate and forcey, doesn't it follow that the loans themselves are bogus and should be forgiven?

[CE]

No, it follows that the government loan guarantees were bogus, because a contract with a criminal known to be paying you back with stolen money is not enforceable. So the government should renege on the guarantees, leaving the lenders to go after the deadbeat former students themselves.

[Sparky]

Will that be on tonite or tonight? Just curious.

[Reason's Bandwidth]

One character really can make a difference.

[Dan]

Tru.

[BakedPenguin]

Firefox and Chrome both have Flash blocking add-ons. Just saying.

[Rice Bingham]

So,
A transgendered guatamalan prostitute, a monkey with herpes, and Rick Perry walk into a bar...

[Tonio]

NFW should student loan debt be forgiven. Because if you do that, then you'd also have to refund the student loan payments made by everyone who fully or partially repaid their loans. Anything else would be unfair.

And that's a lot of money and it would have to come from somewhere.

Plus no private bank would go anywhere near a student loan ever again if they have to eat this debt.

Ironic that this is the crowd that wants "fairness" yet is whining for special treatment.

[Apatheist]

It would most likely be only the federal loans which are forgiven. These are no longer administerd by the banks as of 2 years ago. My loans were magically transfered to the government in the middle of law school (not that I'm complaining about the subsidy).

Despite being able to benefit from this because I'm just starting to pay them back I absolutely oppose debt forgiveness. I knew what it would cost when I took the loans. Noone forced me. I knew that with the starting salary I could expect that I could live frugaly and pay them off quite quickly. If you refuse to do the math beforehand that is your fault.

[poetry]

I read, "Not safe for work should student loan debt be forgiven."

Took me a long, long time.

[EscapedWestOfTheBigMuddy]

Anything else would be unfair.

You haven't been paying attention for the last five years, have you?

I don't recall a single stage of this bail-out-o-rama in which fairness played a part.

Oh, there has been lots of whinging about "My mortgage isn't fair, I thought I was going to get rich flipping this place" but not the slightest peep about making the programs fair.

[Spencer]

Um, why should these be forgiven? A little more than 1/4 of the pop graduates from university. That's the 25%. I'm part of the 25%, but I would love to see the other 75% occupy college campuses everywhere.

[Zombie Jimbo]

I'd rather that the other 75% not go to college.

Well, unless they pay for it themselves, after serious consideration of why they want to go to college and what further education will do for them.

[NAL]

I think he meant that the other 75% should protest on college campuses if they are forced to pay for the 25% who did go to college.

[NAL]

I though I'd point out that even private student loans are gov't subsidized. The gov't pays the interest on the loans while the student is in college up through the (usually 6-month) grace period after graduation. That's a pretty good chunk of change, especially for these 6-figure loans you hear about.

[Apatheist]

Not anymore, the federal government completely took over the subsidized loans.

[Troy]

I owe about $87,000.00 in student loans. Should they be forgiven. Fuck no. It is my fault that I went to law school. I should have went into accounting. I shouldn't expect y'all to pay for my stupidity.

Having said that, what is the Fed going to do to get it's money back? Send me to debtors prison?

I've been unemployed for most of the last three years. I would gladly pay a percentage of any income to paying it back. But hell, I can't even get a job as a fucking dishwasher.

[Spencer]

Troy,

Did you pass the bar exam in your state?

[Gray Ghost]

It may not matter if he passed the Bar exam or not. You still have to have sufficient "character and fitness" to practice law. One good way to not pass the character and fitness check is to be in default on your student loans. Or have any other large outstanding debts. Since 2005, it is a hell of a lot harder to apply for a consumer bankruptcy, and of course, student loans are, for all practical purposes, nondischargeable. Depending on your state, another way to flunk c&f is to have a mental health hospitalization on your record (happened to a buddy of mine.)

In any event, finding a legal job is a giant PITA in this economy.

[Troy]

Three of them.... so?

[Troy]

If you don't have money to pay your bar dues. If you don't have $$$ to pay your CLE's, guess what, ....nothing else matters.

[Gray Ghost]

If you don't have money to pay your bar dues. If you don't have $$$ to pay your CLE's, guess what

This is true. The State Bar may not be good for much, but they are hell on people who practice while under administrative suspension. That and IOLTA screw-ups. Or at least, that's what my GF's bar journal always seems to list as the reasons for suspensions and getting disbarred. Well, that and getting lit up for something criminal, like fraud or drug trafficking.

[NAL]

You should run for office. You can be a stealth libertarian. Run as a statist...pandering left and right, then once you get in, go all Hayek on their asses. I would love to see that happen somewhere.

[Troy]

I hate IOLTA. De minimus stealing. Some laywers fell bad because poor people get screwed, so they allow this abonimation to give to the Legal Services Corporation.

[Federal Dog]

It's not de minimus. It's the state stealing the client's money.

[Spoonman.]

I am legitimately curious - how do you pay to eat?

[Troy]

I live with my brother, and $200.00 a month in food stamps.

[NAL]

Believe it or not, I do have some sympathy for you. Don't take this the wrong way, but in all honesty, the option to borrow $87K should not have been available to you (without some collateral, cosigner, etc.). The fact that it was there is due to gov't intervention into the loan market.

[Troy]

Well, thanks. As far as the student loans go, I don't have very much sympathy for me. I drank the "if you go to college, you'll get a better job" Kool aid.

What annoys me is the stupid shit you have to go through to get your permission to practice law. I blame lawyers little protection racket for that. I started my practice in 2007 of criminal defense cases. By January 2008, what few "private" clients I had, simply weren't paying. Everyone wanted you to do their divorce, but didn't want to pay for it.

[Troy]

No offense taken. I agree. And, BTW, in the name of full disclosure, my undergraduate degree is in philosophy. Oh sure it is an interesting degree that helps me to see how completely full of shit SCOTUS is, but, seriosly, who the fuck needs to know what a modus ponens is in our economy?

[libarbarian]

"Having said that, what is the Fed going to do to get it's money back? Send me to debtors prison?"

If you think that this won't be seriously put forward in the next 20 years, then you aren't paying attention.

[Troy]

Oh they already have it in some places. Can't pay your child support, off to jail with you.

[twenty-something]

I don't know what the solution is...but I definitely think it's a problem that an entire generation of college students put themselves in a position to spend the most productive years of their lives sending 100's of dollars to the federal government each month in the form of student loan payments.

I think this is already a factor in why the housing market continues to drop. Many would-be first time home-buyers can't afford to take on a mortgage payment due to student loan debt.

But the worst part is what I fear debt is doing to potential entrepreneurs. Wealth that would have gone to start new businesses is instead being diverted to the federal government. Add to that all the anti-business legislation that has come out of Congress the last few years, it's no wonder we can't get out of this recession.

[Pro Libertate]

What's sad is that ridiculous tuition is a scam, and the students are, in large part, victims of that scam. However, the problem is that they aren't the only victims, and the people some are looking to for bailouts (i.e., taxpayers) are also victims.

Over and over and over again we see the horrific distortions created by government meddling in and over-regulation of different industries. Naturally, we don't solve that problem; we just pretend like it's caused by something else.

[k2000k]

What is really sad, being one of those students, is that they have convinced my generation to view the ass raping we are recieving as good for us, and to be thankful to our financial molesters. I swear in any other industry if we saw the price tag that college cost people would be up in arms. But nope, we line up, bend over, and vasaline our anus for them.

[Pro Libertate]

It's because there are examples of people in previous generations who were able to make enough to offset the loans. Tougher with an insane tuition bubble coupled with a long-term recession.

[Joe M]

I never had any school loans. Can I just get a cash payout?

[Pro Libertate]

No. You've never suffered like we have.