Is tax money used? Is anyone profiting from the program? Do colleges lose money? Please don’t make this political. I’d genuinely like to understand without all the talking point bullshit.
In: Economics
There are two main ways:
https://www.law.cornell.edu/cfr/text/34/685.209
Public student loan forgiveness, which after 10 years of repayment while employed with a qualified employer (government, 501c3, etc.), your loans are forgiven.
IDR Forgiveness: after 20-25 years of repayment on income driven repayment plans (IDR), loans are forgiven pursuant to the terms of your IDR plan. This doesn’t require any employment by a government agency or not for profit organization.
This isn’t the government just arbitrarily deciding that they want to forgiven debt as others have implied.
A bunch of people who agreed to do work for society are no longer on the hook for it, and the rest of us have to fill in the gap. Which is especially interesting during a time where goods and services are already hard to come by for the average person. Compounding the issue is that the people who are being forgiven are already more well-off than the people who will be paying their bills, so it also serves to widen the divide between the rich and the poor, not lessen it.
In many examples “predatory lending” is used to describe the student loan payment structure. It is all said the the Federal Government provides 90+% of the loans.
Is the Federal Government a predatory lender? If so, what is this not the topic of conversation?
The IRS have different tax brackets.
People who finish a college degree are more likely to be employed than people who didn’t, and are more likely to be on higher tax brackets. People with college degree are also less likely to be in welfare programs.
The government gains more money and uses less money when people go to college.
But because tuition was rapidly rising, people were wary of taking student debt and fewer people were willingly to join college.
Government simply decided to step in and forgive college loan debts either directly or indirectly. Government intent is not exactly to forgive student debt but rather signalize to current HS students that college is fine and that they shouldn’t be wary of it. Helping people getting rid of debt is basically a nonintended effect of that policy.
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