One interesting thing I noticed here is that people don't have see any problem when government give large subsidies to big corps full of money or forgive their debts or use public money to "save" them during economic crashes, but when government give money to people whatever the reason, there is all kind of comments about how this is a bad thing and why government should not be doing it.

Why people are so merciful to big rich companies but so ruthless to other people?

> One interesting thing I noticed here is that people don't have see any problem when government give large subsidies to big corps full of money or forgive their debts or use public money to "save" them during economic crashes, but when government give money to people whatever the reason, there is all kind of comments about how this is a bad thing and why government should not be doing it.

> Why people are so merciful to big rich companies but so ruthless to other people?

Because that's a straw man? A lot of people aren't OK with the government "give[ing] large subsidies to big corps full of money."

You should try asking "people" what they think of bank bailouts sometime.

Part of the reason is that what most people care about is their relative standing (i.e. doing better than their neighbor). Handouts to the rich do not change their relative social standing in society, whereas handouts to people like them (but not them directly), do.

The relative standing matters so much because it affects your social capital (and since your genes are always trying to find/mate with the best possible partner, relative social standing feels a lot more important than absolute one)

That is the reason behind a lot of the backlash to programs like this. It changes (in a small way) the relative standing of ordinary people. Same underlying reason as the NIMBY movement.

The bailouts were loans that were paid back. You know, that thing you're supposed to do when you agree to take out a loan.

Also, those companies failing would have lead to not only their employees getting hurt, but possibly plunge us into a depression - hurting everyone.

What this loan forgiveness does is help a select few by hurting literally everyone else.

You are mistaken.

The covid bailouts were interest-free loans, which are actual free money.

Obviously there were a billion different programs but most people complain about the PPP, which were intended to go to...you know, paychecks. Paychecks for employees that could no longer work due to government enforced shutdowns.

It's a bit of a different situation.

Ostensibly true but in reality if the business were going to pay their employees anyway, they really could do whatever they want with it. It's free $$$ in the same sense as the student loan forgiveness, yet curiously there is much more criticism on here directed towards the latter.

They aren't. You assume that nothing in government happens unless citizens directly order it to; this is a bad assumption. Most of what happens in government, especially at the federal level, is out of the hands of citizens. This is by design as we are a representative republic, but that relies on representatives not being corrupted and controlled by lobbyists and special interests. In the low-trust country we now live in, grift is the order of the day.

Not sure I buy that strawman. Big corp bailouts were wildly unpopular all sides in 2008, and still are.

Edit: that's also ignoring the position of "don't bail out corps and don't bail out individuals alike"

Not unpopular enough to have been repeatedly postponed, vetoed and eventually watered down though, like this one.

To me that speaks more to the will of politicians and where their true interests are aligned and/or the impact of lobbying. There is no money to be made by forgiving student loans.

> One interesting thing I noticed here is that people don't have see any problem when government give large subsidies to big corps full of money or forgive their debts or use public money to "save" them during economic crashes

It’s a VC site…

Big companies with that money can hire more employees, offering the community more jobs and furthering our economy. It's very rare for a large company to take a subsidy and hoard it, or not use it for public goodwill.

And pay those employees less than minimum wage if they can get away with it.

> It's very rare for a large company to take a subsidy and hoard it, or not use it for public goodwill.

Citation needed.

> And pay those employees less than minimum wage if they can get away with it.

Citation needed. Regardless, it's not up to companies to be charities - everyone is acting in their own best interest, of course.

Their PR team of course!

Really? I don’t typically think of companies as magnanimously providing public goodwill, and you could argue that hoarding cash is what plenty of companies have been doing for the last 15 years.

To what degree does that money convert to salary for employees that aren't managerial level? And if a company is in bad shape, shouldn't cuts happen despite a cash infusion?

Big companies top priorities are investor returns, not employing the masses. The result you describe is dependent on many more variables, like product demand actually necessitating hiring.

Money is fungible. Forgiving someone of a $10K or $20K loan is the exact same thing as sending them a check for the same amount. At least some of them will go out and buy a car, boat, RV, or something else that has the same payment as their student loan and feel (rightly) like the government just bought them a new toy. You can pretend that it won't have any effect on inflation, but it will.

It’s not exactly the same thing because of interest. Give someone $10k in cash and they can choose to buy the toys and not pay down their existing debt, so they’ll still be paying $500 a year in interest (assuming a 5% rate).

But if you give the $10k to the lender instead, the person now has $500 more to spend every year in addition to having increased their net worth by $10k.

A good example about why interest (usury) is evil.

> Forgiving someone of a $10K or $20K loan is the exact same thing as sending them a check for the same amount.

False. The government isn't holding the note for student loans: banks are. Paying off these student loans goes to a bank's balance sheet whereas checks sent to people get spent on any number of consumer goods (or invested into Wall Street Bets stonks if that's your thing).

It does indeed go to a bank's balance sheet, and it also eliminates a monthly source of income expenditure from a household.

If the interest amount is more than 0%, it may give more income over the course of the loan term for the person with debt than it wipes out at the bank.

The money someone was spending on the loan and interest may very well go to any number of consumer goods, investments, or other items, though.

That's sort of the point of the whole exercise though.

If you take issue with that, then by the same logic you could also argue that any attempt to help a person pay off debt is encouraging frivolous spending - after all, once the debt is repaid, the person has additional income available which they can spend on things.

> it also eliminates a monthly source of income expenditure from a household

> The money someone was spending on the loan and interest may ...

Not in this case. Federal student loan payments have been paused for over 2 years now, people have not been making monthly payments for these loans.

Which, for the past year or so, has been a completely insane policy. The economy is fine other than inflation and the pause is only causing more of it.

> False. The government isn't holding the note for student loans: banks are.

Huh? I thought private student loads were pretty rare nowadays, and most loans are now through the federal government.

Also, according to https://finance.yahoo.com/news/student-loans-not-eligible-fo..., this loan forgiveness doesn't apply to private student loans:

> Private student loans, by definition, are private and are not eligible to be forgiven. These are loans the borrower owes to student loan providers and not the federal government. Mr. Biden's announcement won't change how these are repaid and borrowers should expect to continue to repay them as they have to date.

Imagine your car payment is $600/month. The govt pays off your car, you have an extra $600 per month in the bank to spend on other things or to save.

Why isn't the government paying off my car, then?

Because your car loan was approved based on your credit history.

A student loan was approved on a gamble.

Now the lenders are trying to find a way to guarantee their returns by making everyone else pay.

The precedent has been established with student loans: why not car loans? Why not mortgages? Why not vacations or clothes or food.... or MEDICAL costs?

All of those debts are dischargeable in bankruptcy, those loans were written based on the credit history of the borrower (excl. medical), and some of those loans (mortgages and car loans) are secured with collateral that can be repossessed and liquidated.

None of those things are true for student loans.

Student loans can be discharged in bankruptcy:

https://www.investopedia.com/how-to-file-student-loan-bankru...

> Student loans can be discharged in bankruptcy:

Mostly false. I prepped and processed bankruptcies for two years and I only came across one instance where a student load was dischargable under chapter 7. IIRC, under a Chapter 13, they can be consolidated as an unsecured debt. I only did a few Chapter 13s so I'd have to go back and reread that part.

Then let us collectively agree to revisit and improve those bankruptcy laws, thereby improving our society going forward. Instead, we said that's too hard and skipped over the legislature in a one-time hack.

No it’s not. That’s only true if they already had the money and were going to pay. A lot of people just can’t pay their student loans so this would just have the effect of taking the pressure off them, not enable them to go out and spend money.

It's a mix of both. Some people will have some money they'd be paying towards loans -- even if perhaps not enough to cover their monthly payments -- and that money will become liquid.

With which money exactly? Not the money the government just "handed" to them, that went straight to the debt repayment.

Possibly some would do with income they had already set aside for repayment - if the person in question had enough regular income to have had no problems repaying before, and if they nevertheless fall under the required criteria:

> Following more than a year of internal debate, the president said Wednesday that he will cancel $10,000 in federal student loan debt for borrowers making under $125,000 a year or couples making less than $250,000 a year. In addition, those who receive federal Pell Grants and make less than $125,000 a year would be eligible for total forgiveness of $20,000, Mr. Biden said.

The amount of people falling into that particular bucket seems rather small to me, compared to the amount of people who this will be a genuine help.

I have a really hard time understanding how we justify spending money on debt relief for an otherwise capable population when 1 in 8 Americans is food insecure, 9% of seniors have overdue medical debt. It feels like the squeaky, social media savvy, politically mobilized wheel got the grease.

It's a bribe, for votes. IMO, it's much better, and more effective, to let individuals and families decide for themselves how their charitable donations will be allocated. Local decision-making yields less fraud & waste, and it's just ... right to have charititable donations be unforced.

.

This. It didn't need to be governmental. Establish a non-profit and encourage people to contribute. Pull Obama off the bench. Use AI to resurrect Jerry Lewis. Put pleas on Tiktok or Wikipedia or wherever.

I like how you put it. I guess I'd also say the same for any time the federal government is giving people a hand up, helping them out. And that it's not just less wasteful but more effective, locally.

I have somewhat complicated feelings about student loan forgiveness.

Oppressive tuition costs shouldn't have happened in the first place. Nor should university cliques and gatekeeping to education and opportunity happen. I'd like that corrected.

On the other hand, I know people who've suffered a lot because they couldn't afford to take on student loans, or because they paid off every predatory dollar. One of them even died at ~30 from the stress pretty directly attributable to that. Others I know continue to suffer. Tuition forgiveness won't help them, and it decreases their relative wealth. Can we also support these other people?

If you ask me, the entire post second education system needs reworked, but I won’t hold my breath.

> On the other hand, I know people who've suffered a lot because they couldn't afford to take on student loans, or because they paid off every predatory dollar.

So you understand the pain

Would they have accepted loan forgiveness for them ?

What do you think of tax cuts for business or home owners ?

How I feel about that:

> Can we also support these other people?

Go ahead and improve this one situation, but don't forget to also help the other people (who might otherwise suffer even more).

If you think the price tag is $300B then I got a bridge to sell you. Moves like this only beget more moves like this. At heart this is a price distortion and it generates a reasonable expectation of more of the same down the line.

$300 billion / 144.3 million taxpayers = about $2,080 per taxpayer. When I did the math in another comment, I was under the impression that was the per-year cost. If it's over 10 years, that means it's only $208 per taxpayer per year. The cost of public tuition near me is about $2,000/year, the average yearly tuition in the US is $8,000/year. So basically: this cost to the individual is nothing compared to the cost of tuition to the individual that created the debt.

As for it being used elsewhere, sure, it could be used elsewhere... but it's not. It's currently money that's just sitting around being debt accumulating interest for banks and the DoE. So it may as well be used to help people out.

Can't understand why the American government wants more inflation and everyone is just calmly watching they increasing it?

Because most people can't put two and two together and most of the media isn't helping them out on that front.

Why should people who can't (or won't) pay their student loans be considered worthy of having money spent on them? Invest in the people who know how to handle financial responsibility: they are far more likely to create economic growth and provide jobs for the people who otherwise couldn't pay their loan obligations.

Because despite your assumptions, there are many reasons someone might be in debt beyond "not knowing how to handle financial responsibility", especially when it comes to student loans. Why do you think financial numbers are a good metric for whether someone "deserves" to survive without excessive struggle/pain?

Don't buy into the contrapositive of the American Dream; the Dream isn't true, and so neither is its contrapositive.

Well put. Plus, I learned a new word: contrapositive. Always a good day in a writer's life ...

Oh, and less we forget, the cost of higher education has increased substantially, so it's easy for someone who got through a four year college with < $10,000 - I myself graduated in '91 with <$8000 debt - to blithely attribute to financial acuity what in reality is the simple luck of growing up at a time when higher learning was more easily obtained.

Why has the cost of higher education skyrocketed? One theory is that government-guaranteed loans created too much demand for college education, a problem many colleges "solved" by jacking up tuition. But did the quality of what was learned go up accordingly? I can't help of think of the line from Good Will Hunting: "You wasted $150,000 on an education you coulda got for $1.50 in late fees at the public library."

We have the internet now, arguably even more information and more accessible than the library. And yet, how many people end up more ignorant after "doing their research" online than they were before they started? The problem with self-education is that there is at least equal parts information and misinformation available. Part of a structured education like university is both filtering out the cruft and teaching people how to filter out the junk on their own. It's not only about being exposed to facts to memorize.

Where education fails is teaching people how to think. What good is access to information if you don't know how to process it? What good is access to facts and data when you cannot define what truth even is? (Your use of the term "contrapositive" tells me you have studied at least a little philosophy... hopefully in the Aristotelian vein.)

> Where education fails is teaching people how to think.

I disagree with this, and in fact, it's my point.

I did study philosophy -- at uni. But I didn't learn about contrapositives in that class, I learned about it in a dedicated Critical Thinking course -- also at uni. I also took a couple of formal logic courses and a few psychology courses there, all electives, and none related to my career (except maybe tangentially in the formal logic of computation). I learned so much in these courses about not only how to think, but common ways people incorrectly think and how to notice and avoid that. I even learned theories of the neurology behind why some of those common mistakes happen, and the importance of each step in the scientific method regarding which of these fallacies each attempts to counteract.

Public K-12 education may fail to teach people how to think, but high-quality universities do not. Which is my point: higher education is so important and should be as accessible to as many people as possible if we're to create the best society we can for ourselves and others.

+1

The concept (and truth value) of a contrapositive is something I learned in a university elective class. It's amazing how higher education might actually provide more value to both individuals and society than job opportunities, isn't it? ¯\_(ツ)_/¯

Kids are heavily pressured to go to college. Some kids are in fact under the threat of going to college or getting kicked out of their home at 18. That kid doesn't really have a "choice". They can't live off the minimum wage jobs that are the only thing they qualify for (and this assumes they'd be hired). As a bonus, the loans you're able to get depends on the income of your parents despite you being an "adult" and regardless of whether your parents help or not. You can end up with a ton of student loan debt without being irresponsible. We are treating 18 year olds as "adults" only as long as it's convenient.

The world is a very hard place to live in and we do very little to prepare 18 year olds for adulthood. Can't get a job or afford a place to live on their own. God forbid they make a mistake. It's cruel and predatory to give them loans they'll be stuck with for the rest of their lives unlike any other type of loan.

> The world is a very hard place to live in and we do very little to prepare 18 year olds for adulthood.

Financially coddling those 22+ is doubling down on failing to prepare them for the future.

22+ wasn't mentioned in the quote...?

18 years old plus 4 years of college.

The real reason here is that the lenders have the same view you have. They would rather lobby the government to force everyone to pay those loans than gamble on getting money back from students who struggle to get jobs with their degrees.

Why hasn't a simple solution of allowing people to discharge these loans in bankruptcy been considered? E.g. retroactively for borrowers before a certain time? I still don't like it, but at least it helps people with $100k in loans who cannot get out instead of giving them a tiny insignificant boost, and doesn't give free money to people who don't really need it?

Devil's advocate: That's an extra $300B in consumer spending that will boost economic activity in every sector rather than going to lenders.

If the goal was $300B in consumer spending, then they should've just given a tax rebate to everybody below a certain income. Instead, this penalizes students who paid off their loans and non-college graduates who might've taken out loans to setup a service business like electrician or car mechanic.

Why does this "penalize" students who have paid off their loans?

If cancer were cured, has everyone who had cancer prior been "penalized"?

The cancer analogy seems pretty off the mark to me.

People taking out a student loan voluntarily took on that debt. Pretty much nobody is voluntarily choosing to get cancer. (Yes, some people perform behavior that increases their chances, but rarely is it a 100% chance)

So if someone chose to do something knowing the negative consequences that would happen (repayment + interest), and then the rules change on them and everyone else in the middle of the contract, can you imagine someone being at least a little unhappy about that?

An analogy that I think fits better:

A teacher says there's an exam next Friday on chapters 1 - 5 from a textbook. You study, do your work, skip spending time with friends and family on the weekend in order to study for the exam.

But then the exam rolls around the teacher says, "Nah, you know what? We're only going to test chapters 4 - 5."

You might think, "But I could have seen my friends instead! I could have spent my limited amount of time in different ways over the past week. The guy who went out and partied all weekend got lucky and will get the same grade as me, ugh." I can certainly understand why someone who studied may feel unhappy about that, or think it's unfair.

> People taking out a student loan voluntarily took on that debt.

When people say this, they are implying that choosing to get a higher education that creates student loan debt is equal to some other choice that wouldn't incur that debt. But of course, this is untrue; the benefits of a quality education are not equivalent to other options. It's not just "student loans or no student loans" in isolation.

To make your analogy somewhat more accurate (though probably still imperfect): it's like the teacher says "study chapters 1-5 and I'll give you a 90% guarantee in the class, and those chapters will be on the test", then the test ends up being only chapter 3. Yes, you spent the extra time studying you didn't need, but you still got the 90% guarantee in the class, so the time debt paid off even if the people who didn't study as much got to hang out with friends more, since they didn't get that 90% guarantee.

Why do so many people think "I had to do something before, so if people don't have to do it in the future, that's punishing me"? You'd have paid those loans whether this policy is put into effect now or not; it's in the past.

Smallpox was basically eradicated, but vaccines didn't "punish" people who died from it before they were invented.

Because if you for example you held off on buying a house to pay off loans, and the day after you saved up enough for your down payment, your buddy Jeff, who ignored his loans, racking up interest, making questionable financial decisions, suddenly gets his loans payed off and now is competing in the housing market with you and everyone else, and home prices rise as a result, pushing your first home out of reach yet again, you are going to be pretty pissed off.

On the other hand, if my other buddy Alice was unable to pay her loans and struggling to pay for food without debt collectors knocking at her door, and now doesn't have to deal with that anymore, that'd offset my ire.

In fact, in a case like that, you should be pissed off at Jeff, not at the people helping everyone which happens to include Jeff.

So why not a tax return for all lower income brackets?

Why should someone with a B.A. be fed and not someone with only a high school diploma?

It's not about feeding people with a degree. It's about reducing the punishment they had but shouldn't have. Ideally, higher education wouldn't cost extra, or at least not excessively so. But since it does, these efforts are to counteract that existing punishment, nothing more or less.

Should those specially seeking education be capable of doing reasonably simple calculations before taking massive amount of loans? It is not like the information of anything related was exactly hidden.

Who said anything was hidden? Most high school graduates in the US understand that going to college almost certainly means a lifetime of debt. But they also recognize the opportunity cost of being uneducated, which they deem a greater cost than the financial cost of loans. And please don't claim that's invalid, because (a) I agree, which is why I did it, and (b) claiming it's invalid implies that money is the only thing of importance in a person's life, which is kind of dystopian a view.

So they made a decision that opportunity > debt. Thus I see no reason to have others pay for their decisions. They freely chose that option. They should be adult enough to live with it and not ask for handouts with tax payers money.

Do you live on a deserted island alone? If not, then why do you seem to think the opportunity cost of other people being uneducated -- your neighbors, local business owners, motorists driving by your house, voters, politicians, etc. -- is only a cost to them, and doesn't affect your life?

Because this money is not free. It comes from the blood and sweat of other tax payers. And goes to clearly morally bankrupt portion of population. Those who over spend with debt money. This likely resulting them repeating such poor decisions as state will be there to fix their own failures.

> Because this money is not free. It comes from the blood and sweat of other tax payers.

Care to take a guess at how much money -- sorry, "blood and sweat" -- this will cost a taxpayer?

$200/year.

How much is annual tuition in the US?

$8,000 on average, $2,000 at my local public college.

If this paves the way for future policies to forgive new loans similarly, that $200/year will decrease as the backlog of existing loans are out of the pool. At which point, every single taxpayer could get the same education for less than $200/year as opposed to $2,000 - $15,000+. ($2,000 being the cost of my local public college, $15,000 being the annual tuition at the school I attended; the + meaning I understand there are more expensive places.)

This is not "the blood and sweat of taxpayers". This is 2 weeks' food bills spread over 52 weeks with the potential to give those taxpayers an education along with everyone else who they're paying taxes for.

> And goes to clearly morally bankrupt portion of population. Those who over spend with debt money.

So you can't think of any reasons someone might have student loan debt other than "they made bad choices and are immorally expecting other people to pay for it"?

Credit card debt can be for anything. Student loans are only for education. No one's trying to subsidize your new car, only something that's important to society.

>>Student loans are only for education.

Nice try, but not true - you get the loan, you can do what you want with it as long as you stay in school...rent, spring break vacations, food, entertainment etc. none of that has anything to do specifically with education.

As someone who graduated with $60k in student loans, thank you for mansplaining to me how student loans supposedly work.

Some loans go directly to the schools. Others do get disbursed to the student. But you said a key phrase in your own comment: "as long as you stay in school". Money is fungible. If I get paid $5,000 in student loans and use that to buy a computer, but then I have to pay $5,000 out of pocket for tuition, that is identical to me paying for tuition with the student loans. The second I decide to stop paying tuition, the loans stop as well. So it doesn't matter what a student spends the check on directly, as long as they're using that money and paying tuition, the student loan is being used for education.

When I went to University, I never directly touched the loan. It always went directly to the university. I couldn’t have taken it to go to spring break even if I wanted to.

> And goes to clearly morally bankrupt portion of population.

So someone makes a bad decision with money as a teenager, probably pressured like a mf by HS counselors and others saying that they must go to college and that makes them “morally bankrupt”. Shit, some other idiot in this thread called the people who thought differently than him “evil”, we’re going hard on the propaganda train today!

> And goes to clearly morally bankrupt portion of population.

How can you even attempt to speculate on the moral character of the student loan debtors ?

You’re forgetting the fairly large group of people who now have neither a college degree nor $10k in loan forgiveness. Oh, and those folks still pay taxes toward this $300b price tag.

Yep. $12/month in taxes to help their fellow members of society. Less money than a Netflix subscription to help many people literally afford food. People who have massive student loan debt that this "fairly large group" does not have.

I'm not sorry to say that if people think it's valid to argue "I shouldn't have to pay $12/month to help other people live a healthy life", then our society is broken because the people in it are broken.

You are assuming that everyone who is having student debt forgiven/paid off by the government has or would have earned the money in question and can now put it into the economy. If that's true then the very reason for absolving the debt, that these people cannot afford to repay their loans, was a lie. More likely they really don't have the money, we're bailing out financial institutions (yet again), and the people who couldn't afford to pay their loans still won't be able to afford to generate enough economic volume to offset this.

There's another angle here too...and that is whether the people who are having loans forgiven even received X number of dollars in value from their college experience. A LOT of these students did not, which is why students that got swindled into scam "universities" are top of the list for forgiveness.

This is an entirely different topic, but one where I'm sure we have a lot of agreement. I suspect a most people on HN could have gotten to where they are in their careers by starting at a computer trade school (with the exception of jobs where 'the piece of paper' is a requirement for some reason).

Exactly.

It's not free money for the economy though. that $300b will be paid for by increased inflation or additional future taxes.

Inflation is decreasing pretty rapidly. I doubt this is going to change that trend in light of the rate increases.

Note that it can both be true that the rate of inflation is going down and that the student debt relief adds to inflation

This assumes a check is mailed or that everyone intends to pay back their loan. They either have 10k in new money or are "saved" from spending 10k in future money.

This will not turn into consumer spending if the debt is just "erased". People who can't pay their loans don't have money to spend elsewhere.

What would lenders have done withe the money? Or the government?

I don't think either would just hide it under a mattress. Lenders would invest it in capital projects and the Government would use it to pay off political supporters.

>the Government would use it to pay off political supporters

Heh.

>To me, that $300 billion could have made more impact elsewhere, for more important and time-sensitive issues.

Perhaps it could be spent making education free.

> To me, that $300 billion could have made more impact elsewhere, for more important and time-sensitive issues.

The current admin chose loan forgiveness- What do you propose ?

We could give all 11 million kids in poverty $27,000 this year for the amount we just spent on a student loan bailout. Wouldn’t fix poverty, but this doesn’t fix student loans either.

Starving children don't vote, and parents seeking to maximize their welfare income already vote for the "right" party already, so that would be a waste of political opportunity.