April 8, 2022 | 1:53 PM

Sorry Snowflake – Nobody Owes You a Thing

Team Outlaw is beginning to feel like a piñata at a party of 12 year old little leaguer’s. The policy failures are taking a beating as are Biden’s and every Democrat in office poll numbers. November will most likely be a political bloodbath.

So trot out the tried and true guppy hooks of freebies. The latest is rolling out student loan debt forgiveness. Again. The current youth movement wants their debts forgiven and their financial sins washed away.

So, gender fluids who took the Nocturnal Mating Habits of Tree Sloths as a degree plan and just had to go to a school where $50000 a semester is common – Sorry Snowflake – Nobody owes you a damn thing, especially forgiveness of a contractual obligation.

Did you have ZIP for career counseling? Did you even check if there was a market for the degree you were getting? Would it support the payments you need to make? Let me guess – Trump was not your president?

Bernie Sanders ran for POTUS on the cancelling student as he feels college should be free. Liawatha Warren also began to drive that bus when she was running for POTUS as well. I’m not for free, but I support affordable for those that want it. Remember, the majority of folks in the US don’t have college degrees and wouldn’t even if it was free. College is not for everyone

While Bernie and Lizzie want to grant a free ride and wash away the debt, here are some key reasons to NOT forgive the loans:

  1. Cancelling student loans is poorly targeted
    Who benefits from student loan forgiveness?Opponents are concerned that wide-scale student loan forgiveness is poorly targeted and will invariably benefit wealthy student loan borrowers who don’t need their student loans cancelled. For example, graduate school debt accounts for more than 40% of all outstanding student loan debt. This includes student loans for medical school, dental school, business school and law school. Certainly, student loan borrowers who attend these schools can struggle with student loans too, and not all of them are high-income earners. That said, the concern is that many student loan borrowers with high income could get student loan forgiveness, even if they can afford their student loan payments. Schmucky Chucky Schumer and Liawatha have said only student loan borrowers who earn less than $125,000 would qualify. Opponents say this threshold is too high, and they believe that if there is any student loan cancellation, it should be limited to borrowers with low income.
  2. Cancelling student loans forgets everyone who didn’t attend college
    The latest student loan debt statistics show that 45 million borrowers collectively owe $1.7 trillion in student loan debt. While 45 million is a relatively high number, it’s less than 20% of the approximately 250 million adults in the U.S. If you have student loan debt, and your student loans get cancelled, certainly it would benefit you financially. However, the vast majority of the adult population no longer has or never had student loans. This includes individuals who couldn’t afford college or never attended college, who also may face financial hardship and have been adversely impacted by the Covid-19 pandemic. So, the policy question becomes this: is it fair to cancel student loans for one group of people, and not provide the same financial relief to the majority of the population who also may have different financial struggles? The “poorly targeted” argument also has been extended to other forms of debt such as credit card debt, which also impacts millions of young people at much higher interest rates. Moreover, mortgage debt is the highest form of outstanding consumer debt in the U.S. Cancelling mortgage debt for millions of Americans arguably could benefit more borrowers.
  3. Student loan cancellation doesn’t stimulate the economy
    LIzzie says cancelling up to $50,000 of student loans per borrower could cost taxpayers $600 billion. However, that doesn’t mean that $600 billion goes back into the economy today. The $600 billion doesn’t go back into the pocket of student loan borrowers, who then can spend money on buying a home or supporting their local businesses. According to The Committee For A Responsible Federal Budget, cancelling all student loan debt would produce only $90 billion in available cash to spend in 2021 and only $450 billion over the next 5 years. Why? With one-time student loan cancellation, borrower saves cash on their monthly principal and interest payment (not their full student loan balance), which could result in several hundred dollars in savings per month, on average. While that is a financial benefit, it’s different than getting their full student loan balance in cash.
  4. Cancelling student loans doesn’t solve the high cost of college education
    Opponents of student loan cancellation say that one-time student loan forgiveness is a band-aid on a much larger, unaddressed problem: the growing cost of a college education. College tuition is only getting more expensive. Cancelling student loans would help borrowers who have student loan debt, but it’s a one-time solution. Given the cost of college, there will be more student loan borrowers who will face the plight of previous student loan borrowers— except they won’t have the benefit of student loan cancellation. Rather than cancel student loans, find solutions to lower the cost of higher education for all Americans.
  5. Cancelling student loans is unfair to borrowers who paid off student loans
    Life is unfair, as the saying goes. For borrowers who recently paid off student loans, they would not benefit under current proposals for wide-scale student loan cancellation. You can call it tough luck. However, many of these borrowers also faced significant financial struggles, and they managed to pay off student loans. Many of delayed having families or getting married, worked multiple jobs, didn’t buy a home, and made other financial sacrifices to pay off student loans and demonstrate financial responsibility. This doesn’t mean that borrowers who paid off student loans 30 years ago should get compensated. However, if Congress cancels student loans for some borrowers, opponents say Congress should provide compensation to borrowers who paid off student loans recently so they are not excluded.
  6. Loan forgiveness rewards fiscal responsibility
    Many students decided to take a frugal path through higher education, which should be encouraged. Perhaps they decided to go to a less expensive school and took on a part time job. If loan forgiveness becomes universal, students who made those smart financial decisions, ensuring they make their loan payments on time, will be given the same benefit as students who went to the most expensive university and have defaulted on their loan payments every month. Why would any student going forward decide to go the responsible route? And why work, knowing taxpayers will pick up the tab?

I could go on, but you get the point.

I am not against loan reform.  As a matter of fact, I would like to see caps on interest rates tied to 2 points above the federal funds rates of borrowing. The banks don’t make as much, but the debt is more readily paid.

This is not like what happened in the great financial meltdown for the housing sector in 2003 to 2009 where laws were violated and folks taken advantage of to get into homes. However, I ‘m not so certain that the more expensive universities don’t bear a degree of responsibility here. How much advice in degree planning was done before shoving a quarter million dollar loan down a student’s throat…?

Ooooh – would little debtor’s be willing to forfeit the Degree for some form of debt relief????

I’d be curious to see when the first ex-graduate sues its Alma Mater over hiking tuition up their shorts….

 

 

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