Hansen Clarke's Bill

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abc12345675
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Hansen Clarke's Bill

Postby abc12345675 » Fri Jun 29, 2012 4:11 pm

So for those who aren't aware, Congress is going to vote on the Student Loan Forgiveness Act of 2012. It proposes that a person who makes payments equal to 10% of their disposable income for 10 years without missing a payment will have the remainder of their loans forgiven.

This would be HUGE for many law students, obviously.

So:
1) Do you think it'll pass?
2) Do you think it's a good idea?

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lnllnl
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Re: Hansen Clarke's Bill

Postby lnllnl » Fri Jun 29, 2012 4:39 pm

abc12345675 wrote:So for those who aren't aware, Congress is going to vote on the Student Loan Forgiveness Act of 2012. It proposes that a person who makes payments equal to 10% of their disposable income for 10 years without missing a payment will have the remainder of their loans forgiven.

This would be HUGE for many law students, obviously.

So:
1) Do you think it'll pass?
2) Do you think it's a good idea?


1) Doubtful.
2) But I like it. Then again, I'm a liberal. I especially like section 5 of the bill that reduces the Public Service Loan Forgiveness program from 10 years to 5 years.

abc12345675
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Re: Hansen Clarke's Bill

Postby abc12345675 » Fri Jun 29, 2012 4:44 pm

lnllnl wrote:
abc12345675 wrote:So for those who aren't aware, Congress is going to vote on the Student Loan Forgiveness Act of 2012. It proposes that a person who makes payments equal to 10% of their disposable income for 10 years without missing a payment will have the remainder of their loans forgiven.

This would be HUGE for many law students, obviously.

So:
1) Do you think it'll pass?
2) Do you think it's a good idea?


1) Doubtful.
2) But I like it. Then again, I'm a liberal. I especially like section 5 of the bill that reduces the Public Service Loan Forgiveness program from 10 years to 5 years.


I find it doubtful as well. Especially in an election year. Old people with crazy credit card debt aren't in favor of the bill at all, so it could backfire in the election.

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Sauer Grapes
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Re: Hansen Clarke's Bill

Postby Sauer Grapes » Fri Jun 29, 2012 4:44 pm

I sure hope it doesn't pass. Where will they get the money? The G has it's own debt problems to be worrying about paying others.

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superbloom
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Re: Hansen Clarke's Bill

Postby superbloom » Fri Jun 29, 2012 4:46 pm

It wont pass. As a debt-ridden 20-something I love it, but as a realist who understands truly how much student loan debt there is right now, its a poor idea. Perhaps draft something similar to apply to only public universities, so students dont just go to the best school possible and not give a shit who pays for it.

abc12345675
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Re: Hansen Clarke's Bill

Postby abc12345675 » Fri Jun 29, 2012 4:46 pm

Sauer Grapes wrote:I sure hope it doesn't pass. Where will they get the money? The G has it's own debt problems to be worrying about paying others.


Where will they get the money? Same place they got the other $16 trillion.

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Sauer Grapes
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Re: Hansen Clarke's Bill

Postby Sauer Grapes » Fri Jun 29, 2012 4:49 pm

abc12345675 wrote:
Sauer Grapes wrote:I sure hope it doesn't pass. Where will they get the money? The G has it's own debt problems to be worrying about paying others.


Where will they get the money? Same place they got the other $16 trillion.

Which is why it is a horrible idea.

Americans need to learn to take responsibility for their decisions again. What happened to the days when we paid our own debts?

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rayiner
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Re: Hansen Clarke's Bill

Postby rayiner » Fri Jun 29, 2012 4:54 pm

Sauer Grapes wrote:
abc12345675 wrote:
Sauer Grapes wrote:I sure hope it doesn't pass. Where will they get the money? The G has it's own debt problems to be worrying about paying others.


Where will they get the money? Same place they got the other $16 trillion.

Which is why it is a horrible idea.

Americans need to learn to take responsibility for their decisions again. What happened to the days when we paid our own debts?


"Personal responsibility" is a total non-basis for government policy. It's useless moralizing.

The question is should the government subsidize higher education or not and how? I think the government should subsidize higher education, but I think the bill is a retarded way to do it. They should just nationalize all universities instead of playing this weird game of publicly funding entities they have no control over.

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lnllnl
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Re: Hansen Clarke's Bill

Postby lnllnl » Fri Jun 29, 2012 4:55 pm

Sauer Grapes wrote:
abc12345675 wrote:
Sauer Grapes wrote:I sure hope it doesn't pass. Where will they get the money? The G has it's own debt problems to be worrying about paying others.


Where will they get the money? Same place they got the other $16 trillion.

Which is why it is a horrible idea.

Americans need to learn to take responsibility for their decisions again. What happened to the days when we paid our own debts?


Reagan and the 97/98th Congress killed the concept of being fiscally conservative.

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Sauer Grapes
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Re: Hansen Clarke's Bill

Postby Sauer Grapes » Fri Jun 29, 2012 4:57 pm

rayiner wrote:
Sauer Grapes wrote:
abc12345675 wrote:
Sauer Grapes wrote:I sure hope it doesn't pass. Where will they get the money? The G has it's own debt problems to be worrying about paying others.


Where will they get the money? Same place they got the other $16 trillion.

Which is why it is a horrible idea.

Americans need to learn to take responsibility for their decisions again. What happened to the days when we paid our own debts?


"Personal responsibility" is a total non-basis for government policy. It's useless moralizing.

The question is should the government subsidize higher education or not and how? I think the government should subsidize higher education, but I think the bill is a retarded way to do it. They should just nationalize all universities instead of playing this weird game of publicly funding entities they have no control over.

Maybe so, but personal responsibility is at the root of the issue causing the problem (amongst other causes).

Should the government subsidize a legal education? If so, for whom and from what schools?

abc12345675
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Re: Hansen Clarke's Bill

Postby abc12345675 » Fri Jun 29, 2012 4:57 pm

So we all agree this won't pass?

I have to say though, I really believe something like this will pass in the next 10 years or so. It really is the next "bubble." More student loan debt than credit card debt.

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Sauer Grapes
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Re: Hansen Clarke's Bill

Postby Sauer Grapes » Fri Jun 29, 2012 5:00 pm

lnllnl wrote:
Sauer Grapes wrote:
abc12345675 wrote:
Sauer Grapes wrote:I sure hope it doesn't pass. Where will they get the money? The G has it's own debt problems to be worrying about paying others.


Where will they get the money? Same place they got the other $16 trillion.

Which is why it is a horrible idea.

Americans need to learn to take responsibility for their decisions again. What happened to the days when we paid our own debts?


Reagan and the 97/98th Congress killed the concept of being fiscally conservative.

I'm not even talking about the government's fiscal responsibility (other than stating an opinion that they should get the debt under control). I'm talking about individuals.

Still, to play into your comment, why should the fact that a past administration or congress made mistakes preclude a current or future one from fixing things? Your argument seems to be one of, they made mistakes so why can't we do the same or worse.

abc12345675
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Re: Hansen Clarke's Bill

Postby abc12345675 » Fri Jun 29, 2012 5:04 pm

[quote=
Still, to play into your comment, why should the fact that a past administration or congress made mistakes preclude a current or future one from fixing things? Your argument seems to be one of, they made mistakes so why can't we do the same or worse.[/quote]

You can't deny, though, that this definitely would stimulate the economy. Those who have already made the 10% over 10 years would get automatically forgiven. And those who have already borrowed but haven't gone into payment yet could have their loans effectively cut in half.

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rayiner
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Re: Hansen Clarke's Bill

Postby rayiner » Fri Jun 29, 2012 5:06 pm

Sauer Grapes wrote:Maybe so, but personal responsibility is at the root of the issue causing the problem (amongst other causes).


That's like saying gravity is the root cause of airplane crashes. Technically true, but not usefully so. The "problem," in the sense of things we can solve through policy (as opposed to facts of nature we just have to deal with), is that given the information asymmetries in the market and bounded rationality of the participants, people overvalue education. How do we address that? Simply continuing to let people overpay isn't going to fix that market failure.

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RVP11
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Re: Hansen Clarke's Bill

Postby RVP11 » Fri Jun 29, 2012 5:06 pm

People who paid cash, or cashed out their savings, are going to rightfully be PISSED.

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lnllnl
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Re: Hansen Clarke's Bill

Postby lnllnl » Fri Jun 29, 2012 5:08 pm

abc12345675 wrote:So we all agree this won't pass?

I have to say though, I really believe something like this will pass in the next 10 years or so. It really is the next "bubble." More student loan debt than credit card debt.


Someone needs to attach Section 5 to some other bullshit bill. I just want that part to pass. 5 years would be incredible. I could volunteer for a deployment and come back and 30% of my payment period would be over...

But worst case scenario for me after law school is I already have a job, I'm single, and I have no kids. I can live well under my means and put the same level of money towards front-loading loan payments instead of paying tuition.

I don't know how the rest of you guys don't have ulcers...

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Sauer Grapes
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Re: Hansen Clarke's Bill

Postby Sauer Grapes » Fri Jun 29, 2012 5:08 pm

abc12345675 wrote:[quote=
Still, to play into your comment, why should the fact that a past administration or congress made mistakes preclude a current or future one from fixing things? Your argument seems to be one of, they made mistakes so why can't we do the same or worse.


You can't deny, though, that this definitely would stimulate the economy. Those who have already made the 10% over 10 years would get automatically forgiven. And those who have already borrowed but haven't gone into payment yet could have their loans effectively cut in half.[/quote]
Maybe, but at what cost? One could argue that the existence of the loans (and more so the subsequent repayment) has already stimulated the economy. Also at what cost though given the education bubble, the problems with the lending institutions, etc. Still you can't deny that it has already and is still stimulating the economy, albeit through a different mechanism than direct consumerism.

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basilseal
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Re: Hansen Clarke's Bill

Postby basilseal » Fri Jun 29, 2012 5:09 pm

RVP11 wrote:People who paid cash, or cashed out their savings, are going to rightfully be PISSED.

Or went to lower-ranked schools on scholarship in a bid to be responsible. This is a massive pile of moral hazard that, fortunately, has no chance of being passed.

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rayiner
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Re: Hansen Clarke's Bill

Postby rayiner » Fri Jun 29, 2012 5:10 pm

I'd be happy with letting people take favorable deductions for their student loan interest. It's absolutely ridiculous that boomers making $350k/year can deduct all of the mortgage interest on a ~$1.2m house while someone making $75k/year can't deduct any student loan interest.

abc12345675
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Re: Hansen Clarke's Bill

Postby abc12345675 » Fri Jun 29, 2012 5:10 pm

RVP11 wrote:People who paid cash, or cashed out their savings, are going to rightfully be PISSED.


Indeed. And so would those with massive credit card debt, especially since this would apparently include private student loans too!
Last edited by abc12345675 on Fri Jun 29, 2012 5:11 pm, edited 1 time in total.

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Sauer Grapes
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Re: Hansen Clarke's Bill

Postby Sauer Grapes » Fri Jun 29, 2012 5:10 pm

rayiner wrote:
Sauer Grapes wrote:Maybe so, but personal responsibility is at the root of the issue causing the problem (amongst other causes).


That's like saying gravity is the root cause of airplane crashes. Technically true, but not usefully so. The "problem," in the sense of things we can solve through policy (as opposed to facts of nature we just have to deal with), is that given the information asymmetries in the market and bounded rationality of the participants, people overvalue education. How do we address that? Simply continuing to let people overpay isn't going to fix that market failure.

I don't agree it is the same as saying gravity is the root cause of airplane crashes at all.

However, I do agree that the education market is in a bubble and that people are not acting rationally, thus overvaluing education. I am not convinced that forgiving student loan debt is the solution to correcting the irrational actions in the market.

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rayiner
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Re: Hansen Clarke's Bill

Postby rayiner » Fri Jun 29, 2012 5:11 pm

basilseal wrote:
RVP11 wrote:People who paid cash, or cashed out their savings, are going to rightfully be PISSED.

Or went to lower-ranked schools on scholarship in a bid to be responsible. This is a massive pile of moral hazard that, fortunately, has no chance of being passed.


I think generally, people vastly overvalue the importance of moral hazard (and incentives generally) in the list of important considerations when discussing economic issues.

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Sauer Grapes
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Re: Hansen Clarke's Bill

Postby Sauer Grapes » Fri Jun 29, 2012 5:11 pm

basilseal wrote:
RVP11 wrote:People who paid cash, or cashed out their savings, are going to rightfully be PISSED.

Or went to lower-ranked schools on scholarship in a bid to be responsible. This is a massive pile of moral hazard that, fortunately, has no chance of being passed.

This is part of why I don't like it as well.

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rayiner
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Re: Hansen Clarke's Bill

Postby rayiner » Fri Jun 29, 2012 5:12 pm

Sauer Grapes wrote:
rayiner wrote:
Sauer Grapes wrote:Maybe so, but personal responsibility is at the root of the issue causing the problem (amongst other causes).


That's like saying gravity is the root cause of airplane crashes. Technically true, but not usefully so. The "problem," in the sense of things we can solve through policy (as opposed to facts of nature we just have to deal with), is that given the information asymmetries in the market and bounded rationality of the participants, people overvalue education. How do we address that? Simply continuing to let people overpay isn't going to fix that market failure.

I don't agree it is the same as saying gravity is the root cause of airplane crashes at all.


Gravity technically causes airplanes to fall out of the sky. But gravity is not something you can change. You just have to design around it. The same is true for the moral character of the people.

timbs4339
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Re: Hansen Clarke's Bill

Postby timbs4339 » Fri Jun 29, 2012 5:20 pm

basilseal wrote:
RVP11 wrote:People who paid cash, or cashed out their savings, are going to rightfully be PISSED.

Or went to lower-ranked schools on scholarship in a bid to be responsible. This is a massive pile of moral hazard that, fortunately, has no chance of being passed.


That's extremely short-sighted. People in our generation carrying that amount of debt for 20 years is going to hurt the economy in the long-run, just at the time people who were "responsible" are going to be in a position where they stand the most to gain from a strong economy.

That's like someone talking about not bailing out homeowners who refinanced their homes 3 times to buy a boat. Then they bitch because their home values plummeted when half the neighborhood defaulted, or they lost their job because the economy crashed generally. I'd like to see both forgiveness and more government regulations capping loan money that can be borrowed. A single public uni system would be ideal.




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