Student Loans

Mass Student Loan Forgiveness Is Already Happening

Biden is using executive authority to write off debts for some borrowers, while a Bush-era law could have even bigger implications.

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While progressive Democrats in Congress have yet to pass a universal student loan forgiveness bill, the Department of Education has nevertheless forgiven billions of dollars in federal student loan debt since Joe Biden became president. And even without new statutory authority, the federal government is slated to forgive increasingly more student loan debt in the future, thanks to the Biden administration's expansive interpretation of the Education Department's existing authorities, as well as a law signed by George W. Bush way back in 2007 that mandates loan forgiveness for certain borrowers. 

Let's start with the federal student loan debt forgiveness for low-income and disabled borrowers, which the Department of Education says has erased "$9.5 billion, affecting over 563,000 borrowers," since January 1, 2021. That sum breaks down roughly as follows: 

  • $1.1 billion in federal student loan debt forgiveness for 115,000 borrowers under a policy called the "extended closed school discharge." This action benefits former attendees of the now-shuttered for-profit college ITT Technical Institute who "did not complete their degree or credential and left ITT on or after March 31, 2008." 
  • $1.5 billion in student loan debt forgiveness for 92,000 borrowers under "borrower defense to repayment," which allows for the discharge of federal loans if borrowers can provide evidence their school "misled" them about their employment prospects or the transferability of college credits, or if it mischaracterized loans as grants, or if the school "engaged in other misconduct in violation of certain state laws."
  • $7.1 billion in "total and permanent disability discharges" for borrowers who are classified as disabled by the Social Security Administration. According to the Education Department's website, "this includes $5.8 billion in automatic student loan discharges to 323,000 borrowers and reinstating $1.3 billion in loan discharges for another 41,000 borrowers."

Yes, that looks like $9.7 billion. But there is likely some overlap between the groups.

There is also an interesting wrinkle to the disability discharge announcement. The Education Department press release says that 98 percent of the 41,000 borrowers who are having their loan discharge reinstated initially lost their discharge because they "did not submit the requested documentation, not because their earnings were too high." To prevent their discharges from being revoked in the future, "the Department will indefinitely stop sending automatic requests for earnings information even after the national emergency ends. This continues a practice that the Department announced in March 2021 for the duration of the national emergency. Next, the Department will propose eliminating the [3-year] monitoring period entirely in the upcoming negotiated rulemaking that will begin in October." 

The above actions can be traced to the Biden administration's interpretation of a section of the Higher Education Act of 1965 that authorizes the secretary of education to "enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption." The Education Department under President Donald Trump took a far more limited view of that authority, though it did use the law in an unprecedented way when it suspended payments and interest on federal student loans at the onset of the COVID-19 pandemic. (You can read my analysis of the debate over that authority here.)  

Aside from people with disabilities and former attendees of for-profit colleges, an entirely different class of federal student loan borrowers is also receiving federal student loan forgiveness, thanks to George W. Bush and the College Cost Reduction and Access Act of 2007. 

The College Cost Reduction and Access Act states that anyone with a Federal Direct Loan who makes 120 qualifying payments after October 1, 2007, while employed by a nonpolitical 501(c)3 nonprofit or a government agency, will have the remainder of their direct loan forgiven under a program called Public Service Loan Forgiveness. It doesn't matter how large your loan is. If your employer qualifies, your loan type qualifies, and you make 120 payments in a timely manner, the remainder is forgiven with no taxes on the forgiven amount. 

According to a Department of Education spokesperson, 

From July 2020 through June 2021, the cumulative number of borrowers receiving Public Service Loan Forgiveness (PSLF) has increased from 2,860 to 8,334, and the cumulative total amount forgiven has increased from $201 million to $756 million.

From July 2020 through June 2021, the cumulative number of borrowers receiving Temporary Expanded PSLF (TEPSLF) has increased from 1,943 to 3,724, and the cumulative total amount forgiven has increased from $83 million to $166 million.

While $756 million and $166 million are far less than $9.5 billion, the more important figure, vis a vis the larger debate over student loan forgiveness, is the per-borrower forgiveness amounts. Using the numbers listed above,

  • beneficiaries of borrower defense and the closed school discharge have received, on average, $12,560 in federal debt forgiveness per borrower.
  • disabled borrowers have received, on average, $19,505 in federal debt forgiveness per borrower 
  • TEPSLF beneficiaries have received, on average, $50,702 in federal debt forgiveness per borrower 
  • PSLF beneficiaries have received, on average, $90,712 in federal debt forgiveness per borrower. 

Those last two numbers are why I think PSLF (which is a nondiscretionary entitlement program) and, to a lesser extent, TEPSLF (which is constrained by the appropriations process) are more significant to the larger student loan debate, even if for-profit attendees and disabled borrowers have snagged most of the headlines.

Given the high loan default rate among for-profit college borrowers and the truly awful business practices of some for-profit colleges, those low-income borrowers are a sympathetic group. While I have previously argued that making student loan debt dischargeable in bankruptcy would go a long way toward properly aligning incentives and bringing down higher education costs, discharging a poor person's federal student loan in bankruptcy has the same impact on the public fisc as forgiving it. The same argument applies to the permanently disabled. With the federal government all but displacing the private student loan market over the last decade, bankruptcy versus forgiveness is a distinction without a difference. 

PSLF recipients are not nearly as sympathetic. They have good jobs in government and at nonprofits. They are well-educated. While some job types command significantly higher salaries in the for-profit world, many master's and bachelor's degree holders can make more in combined salary and benefits working for the government. Terminal degree holders can make more in the private sector, but they are also the most highly compensated public sector workers. 

The PSLF program, meanwhile, is designed so that all of these borrowers pay as little as possible towards their principal balance by using "income-driven repayment" (IDR) rather than the standard 10-year repayment scheme. This means what you pay each month is a small percentage of your income, rather than determined by the life of your loan. For years, the Education Department has given presentations to financial aid administrators showing that PSLF makes sense only if you use IDR, as there'd be no debt to forgive after 10 years of standard repayment. What's more, PSLF applicants received an added bonus from the Education Department during the pandemic: While all federal student loan payments and interest accumulation have been frozen since March 2020, and will be through at least January 2022, PSLF applicants get to count each month in this period as a qualifying payment even if they didn't actually make a payment. 

And while there are currently not many PSLF beneficiaries, there soon will be. When the first cohort of borrowers reached eligibility on October 1, 2017, student loan watchers expected a flood of forgiveness. In July 2021, the Education Department published a request for comment in the Federal Register stating that "to date, nearly 98 percent of student loan borrowers who have applied for PSLF did not receive forgiveness at the time of their application."

But the Education Department is working, with the support of Democrats in Congress, to change that. From October 1, 2017, to April 1, 2021, $452.7 million in student loan forgiveness went to 5,467 approved PSLF applicants. That comes to $82,804 per borrower. We are now up to 8,334 people, $756 million, and $90,712 in forgiveness per borrower. 

Those first two numbers are virtually certain to increase. PSLF applicants are encouraged to submit a form to the Education Department once a year, so that the department can tell borrowers whether their employer qualifies for PSLF and how many payments they have made toward forgiveness. The Education Department received 391,333 of these forms from November 2020 to April 2021. Of that number, 168,197 forms met the criteria for PSLF. 

So while student loan forgiveness to the worst-off borrowers may be commanding the headlines, America's white-collar government and nonprofit workers are quietly getting a massive reprieve from a debt they took on to advance their careers. And more is likely on the way.

It's likely only a matter of time until millions of private-sector workers begin to wonder why you have to be poor or work for the government or a nonprofit in order to get your loans forgiven. And we can partially thank George W. Bush for helping to heighten that contradiction. 

NEXT: Republicans Got What They Deserved in California Recall

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120 responses to “Mass Student Loan Forgiveness Is Already Happening

  1. To a degree, the Education Industrial Complex has its endless wars too.

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    2. Only if they are Masters of the Univers-ity

    3. I just want to comment that I am a federal employee. I have a masters degree, and I make $17 per hour. Where are these high paying jobs your talking about? I was scraping by with the USFS at 18K pee year. Now I’m with the dept of treasury. Meanwhile, my student loan interest has gotten so out of control, I’m in over my head! The IBR plan is all I can afford. My original loan amount was 60K. Now it has just topped 100K!! My payments would be around $900. You think my ‘high paying’ federal job can afford that payment? Tell me where these high paying jobs are, cause I’ve been with the feds for 10 years now and I could really use that money! The best I can ever hope for is that PSLF (if I even have the right type of loan), or the forgiveness after 20 years of paying on it. Which then will be considered income and tax me on that. By then, it will probably be well over 200k! Wow. I might be making 50K 60k per year at my ‘high paying’ government job! Maybe I can afford the tax by then?

      1. What kind of degree did you get? Did you know it wouldn’t qualify you to earn a decent living? Either way, why is it my responsibility to eat the expense for you?

        Maybe you should look for a better job. No one owes you a damn thing.

        1. So that degree in gender studies didn’t provide gainful employment? Who would have seen that coming?!?
          I told my son (I was a divorced father paying a HUGE amount in child support) I’d do whatever I could to help him as long as it was a business or engineering degree. I told him if he wanted to become liberal arts major he’d be better off joining the Navy. He chose a great business school, lived on campus and is now employed and paying off the reasonable amount of student loan debt he has. I paid mine off too 9 years after graduating. Why these spoiled brats think someone owes them is beyond me.

      2. Everything Is So Terrible And Unfair! ™

        Haha.

        1. Equity. If we pay off their student loans then they pay off our mortgages. Seems equitable to me.

      3. Ok, wait, if your original loan amount was $60k and it’s over $100k now you’re doing something really wrong.

        Sounds like bullshit.

      4. Why is it when you morons buy that, college leads to a better job and you won’t have to work so hard schtick, You hold your hand out to the American tax payer? Why don’t you go back to the school and say, you lied to me, this degree isn’t worth shit. Most of the degrees colleges offer today aren’t worth the money you pay for them, and with the decline in the quality of education most young people go out into the world unprepared for reality. If you look at a 6th grade reading primer from the 1950’s you will see materials like Dickens, Hawthorn, Stevenson, and Melville. Now young people go to college to study these authors. If you want to see a blank stare, just ask a high school grad what they think about Henry David Thoreau.

      5. Does the job you do require a masters degree? At $17 an hour it sounds like your job requires a high school diploma. If you’ve been with the feds for 10 years and making $17 an hour you haven’t been trying very hard to get a job that actually takes advantage of your masters, have you?

      6. At Idaho National Lab, I was making $55/hr with plenty of OT available on top of that. If memory serves me, I started at $25. While the standards are often lower in the government than in the private sector, you still do have to develop your skills and take jobs with greater difficulty or responsibility.

  2. “It’s not your fault people told you to get a degree in humanities. ‘You‘ll be a good writer/journalist!’ And how could you not believe them, you poor dear?”

    1. Do what you want child! You deserve millions telling others how to live! Don’t look at average salary by major. Just vote democrat.

      1. Biden said he does not want to give the rich tax cuts…yet champions student loan forgiveness which overwhelmingly benefits the rich and wants to repeal the SALT reductions which exclusively benefits the rich.

    2. I’m in stem and have no issues paying off the remaining college debt I have. With that said, I’m not sure it’s ethical to extend 100k in non dischargeable debt to 18 yos. I thought at the time, if I make 60k/yr, 100 is nothing. Now that I have experience with money, I fully realize the damn fool decision that I made and accept the consequences.
      If my interest rate wasn’t 2%, I’d probably be a bit more bitter.
      We should probably reign these programs in going forward.
      Related is the fact that my alma matter’s tuition has increased by 300% in the 18 years since I graduated. I don’t think that would be the case of the gov wasn’t throwing all this money out for education.

      1. Yeah, I though havine $30k student debt was nuts 20 years ago. Now it’s just insane. I can’t see how it’s worth it unless you are in a course of study that leads directly to a lucrative career. I pretty much recommend against college to any young people who don’t really know what they want to do.

      2. The 100K in debt at 2% is only extended to students because the government guarantees the loans.

        I think I see a solution.

      3. I paid over 8% on grad school loans, and this was after the financial crisis when rates were near zero. About a year after I graduated, they pegged it to some t-bill rate or something.

        College can be a very wise choice for many, but not all. Schools are turning into resorts for some who take bullshit majors and don’t work hard. Tuition is going up to pay for more resort-like amenities so colleges can compete for government handouts. Despite this there’s still a lot of good learning happening in colleges.

        1. Tuition is going up because loans are readily available to all, thanks to the government guarantees. The higher revenues allow colleges to upgrade their dorms and other facilities, in order to compete for better students so their ratings will go up so they can charge even more.

  3. You might think that Democrats would be speaking out about those greedy universities charging an arm and a leg for tuition for a captive consumer base and discussing the imposition of price controls on them, but you would be wrong.

    1. Making people pay (and work) for things is racist.

      1. But where does the Executive derive the authority to unilaterally cancel legal contracts?

        1. Are we talking about student loans or eviction/foreclosure moratoriums?
          In the lawless banana republic that is the USA in the 2020s, you have to be more specific.

    2. Just don’t pay. Fuck credit. Live the cash lifestyle.

    3. What? I criticize their socialist re-education camps?

    4. According to the Dems, only for-profit colleges charge too much and deliver too little. Yet somehow they still make a profit.

  4. Oh, goody. Another way for government to give my money away.

    Still waiting for one of those folks who attended college on my dime to come by and mow my lawn in thanks.

    1. Or at least get your coffee order right.

      1. Or figure the correct change.

    2. Ya know, I was one of those people who went to college that was actually serious about getting a good paying job. I was told all my life that college would get me there. While I was in school, I was told that I was in a great position because all the baby boomers are retiring and by the time I graduated, I’d have NO problem finding a job. The school also told me that I should go ahead and get my masters degree because it would give me ‘leg up’ in getting an even better job. To y disappointment, all I could get was a seasonal job at 18k per year. They told me if I stuck to it, I’d get hired on permanent. They said the average person had to put in about 6-10 seasons before a career position comes around. Meanwhile, between searching for other jobs and my student loan debt gaining interest, I had to quit and work at a factory because 18K a year was not enough to pay my bills or have anything. And I have a damn MASTERS degree in science!!!!!
      If I could go back, I would NOT go to college. I would get a trade. I’m sure there’s thousands more people in my same situation. So sorry fory mistake. Sorry the f’ing baby boomers who won’t retire and give us a chance. They are so proud that they worked at that place for 45 years and they could’ve retired 20 years ago! Don’t those selfish people realize they are keeping the careers that Im Supposed to be working at now? But instead, they sit and bitch about how they pay for our college education.

      1. Yeah, this is one boomer who is bitching about paying for your education. 10 years on the job with a masters and making $17/hr
        tells me either you’re as whiny, bitchy and entitled as you sound or you just have to live someplace like western Colorado “cause lifestyle”. Move to central Illinois, if you can dig a hole with a shovel I’ll put you to work with a 10% raise. In the meantime I’ll pony up for your education as soon as I get reimbursed for putting both my professionally employed kids through school.

      2. Everything Is So…….,,

        Lol. Science!!!!!! Really? You sound like a good fit for the CDC!

        Haha.

        1. I’m guessing his master’s is in a “social science,” e.g. psychology, sociology, communications, etc. Those things are pretty worthless. That would explain the $17/hr.

      3. The boomers are retiring now. Everyone’s quitting.

  5. allows for the discharge of federal loans if borrowers can provide evidence their school “misled” them about their employment prospects

    With all due respect, why is it any duty of the school to “lead” about employment prospects? “We’re teaching you about subjects you requested. What you do with this knowledge is up to you.”

    1. It’s not. But if they actively mis-led you, that could be fraud.

      What confuses me is why the taxpayers are on the hook in that fraud situation. Why don’t the borrowers take up their claim against the university for that amount?

      1. Yeah, not sure why it is MY concern if Johnny Idiot was ripped off by Shit State U.

    2. They do push the “loans are totally worth it” line pretty hard. Or did many years ago when I was getting student loans, I assume that hasn’t changed. I don’t know if that means they were defrauded (probably not). But I’d be a lot happier if the schools were on the hook for the money rather than the taxpayer.

      1. I’d be all for allowing loans to be discharged thru bankruptcy as long as schools pay 75% of the failed loan.

    3. Arts, humanities, and social science departments hardest hit.

    4. My school mislead me and I don’t consider it a reason to discharge my debt.
      They said 98% of graduates are placed and showed me info on salaries for college grads in my field. Unfortunately I graduated near the recession and was forced into unrelated work for 5 years. Outside of working 30 hours of OT per week as a on site truck driver, I didn’t make what they showed me until 2012 or so. The income based forbearance added 20% to the top line of my loan.

      I don’t believe they had intent to defraud. People need to nut up.

      1. I’ve been nutting up my entire life.

        1. I started around 13

  6. Biden is pushing a program that benefits government and NGO employees? Is it a coincidence that these tend to be democrats?

    I love how they use the sob story of the hoodwinked ITT student with $10k in debt to justify paying off the $90k debt of the kid who went to a private liberal arts college.

    1. Of course, that said: If you have to work for the government for 10 years to get a $90k benefit … meh.

      1. They also are getting paid a lot better in those ten years then they would in the private world….

    2. Bubba the toughest part for me to reconcile is that I did pay off undergrad and graduate degrees completely on my own and while (my feelings obviously) “irresponsible” as a best descriptor to my early morning mind, get to live off those who may have not went to school or even did and paid monies.

      1. Yeah, that’s the part that gets me. I paid mine off by the time I was 25 or so.

      2. Living frugally and paying off debt is white privilege.

    3. I know several people who went to ITT, got good (lower level) jobs in tech, and had no problem paying back their loans.

      The problem was created when Obama (with the backing and encouragement of public colleges) decided to crack down on private colleges, costing them their accreditation. People somehow forget that. “ITT (or other successful private school) is tricking people into overpaying for a degree. Let me help by making that degree worth even less!”

  7. My view is that the PSLF is horrible law. WTF are we essentially giving government employees, on the public dole already, free tuition for their questionable degrees? Or work for supposedly nonpartisan (mostly leftist) non profits?

    That said, Congress passed the law, so we are stuck with it.

  8. Why on earth do I have to pay for that loser’s useless college degrees?

    1. So they can talk down to you from some government ivory tower demanding that you vax, mask and not express free speech. Deplorable. Insurrectionist. Conspiracy theorist.

      1. That’s funny and brings up discussion paths that would be great to dissect.

  9. It’s likely only a matter of time until millions of private-sector workers begin to wonder why you have to be poor or work for the government or a nonprofit in order to get your loans forgiven. And we can partially thank George W. Bush for helping to heighten that contradiction.

    I’m wondering why people like me who made good choices about our education have to pay for people who made poor choices, regardless of whether they’re poor, work for the government, or work at starbucks with a degree in French Literature and international studies?

    1. maybe we didn’t make good choices from what this article is telling me??? 😛

      1. Instead of canceling loans, let’s make much better choices and cancel democrats. Permanently.

    2. I ain’t turning down free money even if I do agree with you. I’ve been a net tax payer for a bit now, so I’m just paying a middle man if this retarded policy passes.

      1. Yeah, I’m with ya on that. I paid off my mortgage and car loans, so I don’t need much UBI to get by.

        Try me, bitches.

  10. To the masked “Master of Degrees” in the photo at the top – maybe you should have gotten your degree is something more useful than Underwater Basketweaving. You never seen engineers and rarely see hard-science degree holders in these protest lines. Ya think maybe there’s a reason?

    1. Probably because we oppose such graft. And we are too busy being compensated for producing.

    2. Even more disturbing is the unwritten message that Master Degrees are now an intrinsic right, and need to be funded by the Federal government.

      1. How else are we going to extend childhood to age 26.

  11. I got my loans from my local bank before the Feds took over student loans.
    I paid it all back with interest.
    Why are these people getting their loans forgiven?
    Why is the Federal government in the student loan business?

  12. Thanks to the DOE and the CDC we no longer have to pay off student loans or pay rent. When can we expect the FDA to make all food free, and HHS to provide free BJs?

    1. SUVs for all. Everyone deserves safe, comfortable transportation.

    2. I would like to enroll in the HHS free BJs plan, please.

      1. Careful what you wish for. They’ll send a dude. And if you object….. not good for you, or your social credit score, comrade.

  13. Just more evidence that democratizing college was a mistake.

    1. Maybe we have not democratized college enough. How about letting students vote on tuition (and degree requirements)?

      1. What’s a revolution without an Order No. 1?

  14. $250 a month for what looks like the rest of my life. Where do I sign up? Get this gone!

  15. I grow bored with these endless free college give aways by the government . Yawn.

    The Democrats need to kick it up a notch. How about paying the kiddos not to go to college? On top of all the stimulus, welfare, ebt, ubi, whatever.

    They could call it a “reverse scholarship”, just agree to get paid to not further their education. No need to limit it to four years either.

    “If you think getting educated is lucrative, try staying ignorant”

    1. Peter Thiel is ahead of the curve on this one:

      https://www.thielfellowship.org/

      “The Thiel Fellowship gives $100,000 to young people who want to build new things instead of sitting in a classroom.”

      1. “I invented a popsicle made out of Mountain Dew”-Homer Simpson

  16. The problem is not that he has a Master Degree and is now shackled in debt, the problem is that he chose to get his Master Degree by shackling himself in debt. There is a different. The debt was wholly his choice. He chose to continue his education to the post-graduate level and then chose to finance that with debt. Holy shit, I didn’t even know you could get Federal assistance for post-graduate education, other than research grants and stuff.

    1. The borrower is a slave to the lender.
      Go get a degree that is a bad investment. Then add another degree on top of that.
      Borrow so you can drive the best vehicle you can afford.
      Get the biggest mortgage they will provide and use every last dime on the best house you can buy.
      Keep up with the Jones; stay indebted forever.

      1. At least that house might appreciate while meeting your shelter needs.

        But yeah, point taken, don’t go too big on that either.

    2. Tuition is so fucking high, how the hell is anyone under 40 supposed to get an M.A. without taking out loans? It’s ridiculous to expect that anyone can work their way through school at these prices.

      But the real problem is that, despite the massive distortions, higher education is still a somewhat functioning market, and in order to get in, you have to compete with dumbfucks like this “Master of Degrees” who are willing to commit financial suicide for it. And these dumbfucks are enabled by easy credit and federal loan subsides. In turn, this enables universities to bloat their administrative staffs and do outrageously expensive projects on their campuses, thus necessitating even higher tuition. Wash. Rinse. Repeat.

      1. When I went to school in the 90’s, the saying was that if you could go to college without loans, you probably did not need college in the first place.

      2. My university just hired 17 diversity and inclusion officers. You would think one would be enough.

  17. >>as well as a law signed by George W. Bush

    biggest (D) in the history of (R) presidents.

    1. Nixon was a pretty big (D) for an (R)

  18. Where “shackled by debt” = “expected to pay back tens of thousands of dollars I borrowed to improve my career prospects”.

  19. “Unemployed Superhero” with a masters in what?

    1. Lesbian Dance Theory?
      He looks very like an absolute expert.

  20. Yes, the 10-year PSLF numbers are about to start going up bigly.

    But more than that, it looks like this article doesn’t mention the 20-year and 25-year PAYE and IBR periods that apply to basically ALL federal student loan debt that exists.

    Yes, that is over 1 trillion dollars.

    The forgiveness is written right into their loan documents. It’s part of the contract. In fact, for people who went 100k, 200k, and 300k plus in debt for graduate degrees and the like, many would say it would have been insane to sign up for that kind of debt (at high interest rates too), and they would never have done so, if it were not for the fact that part of the agreement is that you only have to pay a small percentage of your discretionary income for 20 or 25 years (which may hardly cover interest!) and then poof, it all goes away.

    So really, mass student loan forgiveness was already a done deal long ago.

    Of course, the real beneficiaries of these trillions, much more so than students, are the universities and professors and administrators who received the money.

    Solution? End government involvement in student debt altogether. It will virtually dry up, and higher education will have to fundamentally restructure itself.

    1. “…Solution? End government involvement in student debt altogether. It will virtually dry up, and higher education will have to fundamentally restructure itself.”

      Agreed, but the profs are peddling the lefty bullshit on which the government is based, so any attempt to de-fund them is going to be a hard sell.

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  22. Why don’t we just have young people declare bankruptcy! What a “let them eat cake!” level of tone deafness.

    1. If you’re a 20 year old and you squander your money, whether it is on a Ferrari or a useless college degree, you should be held accountable.

      1. At least the Ferrari can be repossessed.

  23. at this point i would trade 100% student loan forgiveness in exchange for the feds getting completely out of the business of monkeying around with higher education funding.

  24. Student loan forgiveness should be taken out of the budgets and grants received by the educational institutions that the students attended.

  25. ^THIS is exactly why the Federal Government SHOULD-NOT!!!!!!!!!!!! be The People’s BANK Industry.

    1. yeah, let the Post Office handle it, as AOC and Bernie proposed.

      1. lol… The Federal Post Office? How to restrain a 500-legged octopus?

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  28. Mass Student Loan Forgiveness Is Already Happening

  29. Mass Student Loan Forgiveness Is Already Happening

    Great, now I can get that degree in Lesbian Dance Theory and you’ve gotta pay for it.

  30. Dear Slaves, The KING of the Nazi-Regime (def; National Socialist) has given away your labors to those rightly entitled slave-owners (i.e. Future Nazi Voters).

    Nothing builds a Nazi-Regime faster than paying for support.
    Crony Socialism for the WIN!

  31. PSLF is an interesting program. In 2007, when it was enacted, I was a first-year medical student. By the time I graduated in 2010, it was definitely on all of our radars, most of us graduating with $100k+ debt. Medical residents, who made at the time $40-50k/year, can put their loans in forbearance for the entirety of their residencies, 3-7 years depending on the specialty, where they don’t make payments but interest still accrues. No, we were told, YOU WANT TO MAKE PAYMENTS during residency, because if you do income-based repayment, your payments will be very low, even $0, and will ultimately count toward your 120 qualifying payments. And, letting you in on a secret here, “public service” doesn’t just mean working for the government or a charity. Many (most?) hospital systems and clinics are or are part of 501(c)3 organizations. I worked for the largest hospital systems in 3 different cities over the last 10 years, and spent 5 years in the military, and when I hit that 120-payment mark I applied for forgiveness and got the remaining $48k on my loans wiped away. And, it’s true as the article says, the last 10 “payments” or so I made were $0 owing to the pandemic pause on student loan repayments.

    So, I guess the rich do get richer? Doctors can generally count on a decent enough income to pay off even mid-6-figure loan amounts. But any change in PSLF would have to have a grandfathering clause, because I know from many of my old classmates and colleagues that we made decisions on where to work based on whether our employment would qualify for PSLF, and since it takes 10 years to make all the 120 monthly payments, it would be pretty unfair to pull that rug out, even if the program itself is misguided.

    1. I would add too that there is a moral hazard element to PSLF, and any loan forgiveness program, that you are basically incentivized to pay off as LITTLE as possible, if forgiveness is promised and right around the corner. Hence why it is advantageous to make payments when your income is low and your payments are low. I also had private loans, which I paid off, and which I was incentivized to pay off as quickly as possible, always making payments way beyond the minimum. But from 2007 onward, on my federal loans, it was all about gaming the system to pay off as little as I could each month, as long as the payment counted toward that magic 120.

  32. In the case of borrowers who could show evidence that the schools violated state laws or acted fraudulently, is the federal government following up and suing the schools to recover the funds? This would be akin to your insurance company making you whole, then going after the guilty party to recover damages on your behalf (known as “subrogation”).

  33. The thing that gets unsaid in so many of these debates is how unnecessary these extreme tuition bills are. Pretty much everyone can live at home and commute to community college. Most states have teaching colleges that will get you the final 2 years for your bachelor’s for under $20K of tuition.

    You have all of these private liberal arts colleges and research universities that are priced and run like ultra luxury goods (“you can be taught intro to calculus by the professor that invented reticulating splines!”), but they want to pretend that they aren’t just for the elite, so they get the government to bail them out when they try to include lower/middle class students in their ranks.

    If the government really wanted to address education affordability, it would do more to steer folks to more affordable pathways for education. It is terribly inefficient to hire researchers to teach one class per year and call them professors. Teaching/community colleges generally have their instructors teaching 6-8 classes per year and taking on much more of the grading/discussion section responsibility that are farmed out to graduate students at research universities. So, hypothetically, if the goal is affordability, we really ought to be pushing as many undergraduates as possible through the model where instructors are nearly an order of magnitude more efficient. And the government really ought to reexamine whether for its own white collar workforce a 4 year degree ought to be a prerequisite. Even with cheap tuition, the opportunity cost of a 4 year degree vs a 2 year degree is considerable.

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  36. Such awesome information, I’m coming daily here to read fantastic articles.

    1. Yeah really awesome.
      I could’ve started my Lesbian Dance degree holiday months ago.
      Who cares if its absolutely useless?
      I get a free government-paid 4 year holiday at some weirdo college.
      Amazing!

  37. “PSLF recipients are not nearly as sympathetic.”

    It is interesting that a writer for a publication that emphasizes contract rights and ‘laws’ of economics would rely on a lack of being “sympathetic” to justify denying compensation offered for employment. The PSLF program compensates for 10 years of qualifying service by cancelling outstanding student loan debt. It is, in effect, an employment benefit. Perhaps it would be better to simply pay government employees higher salaries. But I doubt that would get much “sympathy” on this website.

    Our education system and economy have some serious problems, perhaps, but the government needs to attract and keep qualified people right now. And it does that by competing in a ‘free market’ for labor. Perhaps if the labor market was not ‘free’, and instead people were conscripted into working for the government, there would be no need of such employment incentives. How about that for a Libertarian policy?

    If government jobs are so “good”, why is it so hard to fill them with qualified employees? Student loan repayment is one of the major benefits that government/non-profit work offers. There are a *lot* of government employees in sectors like science, tech, law, business, etc. (that don’t have ‘worthless’ liberal arts degrees) who chose such work in large part for the government due to such incentives (I am one of them). There may be valid policy arguments for or against such programs, but “sympathy”, according to Austrian school economists, is not a factor in the equation.

  38. Colleges should have to co-sign any government loans given to their students.

    If what they say is true about your degree paying for itself, then they have nothing to worry about, right?

    If this were to happen, I suspect that colleges would offer a lot fewer degrees that end in the word “Studies”.

    1. Excellent Point +1000000….
      “If what they say is true about your degree paying for itself” ….

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