Hansen Clarke's Bill

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Slobberson
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Re: Hansen Clarke's Bill

Postby Slobberson » Sun Jul 08, 2012 8:28 am

Perseus_I wrote:
Slobberson wrote:
Perseus_I wrote:
+1. Government giving money to private corporations (universities these days are basically corporations) is just asking for abuse. Since they are part of the "free market" there's nothing to keep them from raising tuition by the amount of whatever aid they get (and more, so they get more aid). It's so wasteful.


Right, but government run entities don't waste any money. You guys are geniuses.


Public money appropriated to a public institution tends to turn into a poorly-run organization that everyone loves to hate (See the Social Security Administration). Public money appropriated to a private institution has a tendency to become somebody's bonus. Student aid is no exception.

Allowing students to discharge their debt in bankruptcy without consequences to the university who admitted the student and took federal money provides all the wrong incentives. If we want an even worse mess than what we have, then yes, pass this bill. On the other hand, shifting the burden of defaulted student loan debt from students and the public, onto the universities, might not be a terrible idea. If Thomas M. Cooley got a bill in the mail from Uncle Sam every time a student discharged her student loan debt in bankruptcy, they might think really hard about some of their shady practices.


Sure, but the guy you quoted said they should nationalize the public universities. I think he meant have them be run by the gov.

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drmguy
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Re: Hansen Clarke's Bill

Postby drmguy » Sun Jul 08, 2012 8:58 am

I finally got around to skimming the bill, and I was wrong.

`(3) QUALIFIED LOAN AMOUNT- After the borrower has made 120 monthly payments described in paragraph (1), the Secretary shall forgive--
`(A) with respect to new borrowers on or after the date of enactment of the Student Loan Forgiveness Act of 2012, the sum of--
`(i) the balance of principal and fees due on the borrower's eligible loans as of the time of such forgiveness, not to exceed $45,520; and
`(ii) the amount of interest that has accrued on the balance described in clause (i) as of the time of such forgiveness; or
`(B) with respect to any other eligible borrower, the balance of principal, interest, and fees due on the borrower's eligible loans as of the time of such forgiveness.

So how do we get this thing passed?

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Perseus_I
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Re: Hansen Clarke's Bill

Postby Perseus_I » Mon Jul 09, 2012 10:49 pm

drmguy wrote:I finally got around to skimming the bill, and I was wrong.

`(3) QUALIFIED LOAN AMOUNT- After the borrower has made 120 monthly payments described in paragraph (1), the Secretary shall forgive--
`(A) with respect to new borrowers on or after the date of enactment of the Student Loan Forgiveness Act of 2012, the sum of--
`(i) the balance of principal and fees due on the borrower's eligible loans as of the time of such forgiveness, not to exceed $45,520; and
`(ii) the amount of interest that has accrued on the balance described in clause (i) as of the time of such forgiveness; or
`(B) with respect to any other eligible borrower, the balance of principal, interest, and fees due on the borrower's eligible loans as of the time of such forgiveness.

So how do we get this thing passed?


Unless it involves consequences to the universities when graduates cannot pay all of what they owe, let's hope it doesn't pass. As written, it's basically a taxpayer subsidy for six-figure administrator bonuses and vacations in the south of France.

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drmguy
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Re: Hansen Clarke's Bill

Postby drmguy » Mon Jul 09, 2012 10:50 pm

Perseus_I wrote:
drmguy wrote:I finally got around to skimming the bill, and I was wrong.

`(3) QUALIFIED LOAN AMOUNT- After the borrower has made 120 monthly payments described in paragraph (1), the Secretary shall forgive--
`(A) with respect to new borrowers on or after the date of enactment of the Student Loan Forgiveness Act of 2012, the sum of--
`(i) the balance of principal and fees due on the borrower's eligible loans as of the time of such forgiveness, not to exceed $45,520; and
`(ii) the amount of interest that has accrued on the balance described in clause (i) as of the time of such forgiveness; or
`(B) with respect to any other eligible borrower, the balance of principal, interest, and fees due on the borrower's eligible loans as of the time of such forgiveness.

So how do we get this thing passed?


Unless it involves consequences to the universities when graduates cannot pay all of what they owe, let's hope it doesn't pass. As written, it's basically a taxpayer subsidy for six-figure administrator bonuses and vacations in the south of France.

It's basically a way to help pay off our loans.

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Perseus_I
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Re: Hansen Clarke's Bill

Postby Perseus_I » Mon Jul 09, 2012 10:56 pm

drmguy wrote:
Perseus_I wrote:
drmguy wrote:I finally got around to skimming the bill, and I was wrong.

`(3) QUALIFIED LOAN AMOUNT- After the borrower has made 120 monthly payments described in paragraph (1), the Secretary shall forgive--
`(A) with respect to new borrowers on or after the date of enactment of the Student Loan Forgiveness Act of 2012, the sum of--
`(i) the balance of principal and fees due on the borrower's eligible loans as of the time of such forgiveness, not to exceed $45,520; and
`(ii) the amount of interest that has accrued on the balance described in clause (i) as of the time of such forgiveness; or
`(B) with respect to any other eligible borrower, the balance of principal, interest, and fees due on the borrower's eligible loans as of the time of such forgiveness.

So how do we get this thing passed?


Unless it involves consequences to the universities when graduates cannot pay all of what they owe, let's hope it doesn't pass. As written, it's basically a taxpayer subsidy for six-figure administrator bonuses and vacations in the south of France.

It's basically a way to help pay off our loans.


That's because you are short-sighted and ignore the consequences to the wider society.

This bill may be good for you in the short-term, but it ignores the underlying social problem, which is that university administrators are blood-sucking scoundrels. So why not add in a subsection that kicks back the unpaid portion of the loans to the university? If they can't make it financially, then nationalize them or just let the bad ones die off (no bailouts, sorry).

dixiecupdrinking
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Re: Hansen Clarke's Bill

Postby dixiecupdrinking » Mon Jul 09, 2012 11:34 pm

Perseus_I wrote:
drmguy wrote:
Perseus_I wrote:
drmguy wrote:I finally got around to skimming the bill, and I was wrong.

`(3) QUALIFIED LOAN AMOUNT- After the borrower has made 120 monthly payments described in paragraph (1), the Secretary shall forgive--
`(A) with respect to new borrowers on or after the date of enactment of the Student Loan Forgiveness Act of 2012, the sum of--
`(i) the balance of principal and fees due on the borrower's eligible loans as of the time of such forgiveness, not to exceed $45,520; and
`(ii) the amount of interest that has accrued on the balance described in clause (i) as of the time of such forgiveness; or
`(B) with respect to any other eligible borrower, the balance of principal, interest, and fees due on the borrower's eligible loans as of the time of such forgiveness.

So how do we get this thing passed?


Unless it involves consequences to the universities when graduates cannot pay all of what they owe, let's hope it doesn't pass. As written, it's basically a taxpayer subsidy for six-figure administrator bonuses and vacations in the south of France.

It's basically a way to help pay off our loans.


That's because you are short-sighted and ignore the consequences to the wider society.

This bill may be good for you in the short-term, but it ignores the underlying social problem, which is that university administrators are blood-sucking scoundrels. So why not add in a subsection that kicks back the unpaid portion of the loans to the university? If they can't make it financially, then nationalize them or just let the bad ones die off (no bailouts, sorry).

Seems to me that all this does on a prospective basis is provide a minor subsidy to students that barely covers the cost of one year at a private university. The only future students who this would even benefit are those whose average annual income for the decade after they graduate is less than $45k. Anyone else will more than pay off the amount forgiven under the bill. What are you guys on about? There's no moral hazard problem in retroactively paying off people's debts. (Allow me to clarify: If you think that the prospect of, at some point, receiving some sort of student loan bailout again in the future will encourage people to borrow even more recklessly toward school than they already have been... I think you actually give too much credit to the average person's ability to rationally assess risk.)

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buckilaw
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Re: Hansen Clarke's Bill

Postby buckilaw » Tue Jul 10, 2012 12:00 am

This Bill would exacerbate the student loan mess, even more incentives for students to major in unmarketable degrees. And universities are still going to gouge prices through the roof.

You can fix the student loan mess by doing two things. First, the government needs to stop guaranteeing loans. Second, allow the loans to be discharged in bankruptcy. Both these things need to be done together. This would put pressure on the issuer to determine the odds of having a loan paid back. When issuers look at questionable employment prospects they are not going to loan money, shuttering institutions like Cooley relatively quickly. Downward pressure on tuition would also be created because middle of the road schools would eventually be able to max revenue by lowering tuition - assuming the median student can get a loan for X the school can't charge much more than X.

I know this would mean less kids going to college, IMHO, not necessarily a bad thing.

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Perseus_I
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Re: Hansen Clarke's Bill

Postby Perseus_I » Tue Jul 10, 2012 2:24 am

buckilaw wrote:This Bill would exacerbate the student loan mess, even more incentives for students to major in unmarketable degrees. And universities are still going to gouge prices through the roof.

You can fix the student loan mess by doing two things. First, the government needs to stop guaranteeing loans. Second, allow the loans to be discharged in bankruptcy. Both these things need to be done together. This would put pressure on the issuer to determine the odds of having a loan paid back. When issuers look at questionable employment prospects they are not going to loan money, shuttering institutions like Cooley relatively quickly. Downward pressure on tuition would also be created because middle of the road schools would eventually be able to max revenue by lowering tuition - assuming the median student can get a loan for X the school can't charge much more than X.

I know this would mean less kids going to college, IMHO, not necessarily a bad thing.


This would have the tendency to prejudice low-income and minority students. The smartest ones would probably get full rides at local state schools, but it would ensure that only the wealthy could attend elite schools because private lenders might look to family income as much or more than future job prospects. This is only conjecture, but not completely unrealistic, given the nation's history with redlining and racist/classist homeowner's associations, etc.

I still think passing a version of this bill but adding a provision to kick back the unpaid portion of discharged student loans to the university makes more sense. It would shutter art history programs and TTT's in a hurry. It would place the social cost of wildly inflated tuition and unmarketable degrees on universities, rather than on students and society.

The current form of this bill is a corporatist's dream: Imagine if the EPA, instead of regulating pollution, simply used taxpayer dollars to clean up the pollution produced by private corporations with no consequences to the corporations for polluting. This is how things would be under this bill

A scarier version: The EPA, instead of regulating pollution, requires the victims of pollution to bear the full cost of cleaning it up. This is similar to how the current system of higher education funding works.

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fatduck
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Re: Hansen Clarke's Bill

Postby fatduck » Tue Jul 10, 2012 11:24 am

Perseus_I wrote:
buckilaw wrote:This Bill would exacerbate the student loan mess, even more incentives for students to major in unmarketable degrees. And universities are still going to gouge prices through the roof.

You can fix the student loan mess by doing two things. First, the government needs to stop guaranteeing loans. Second, allow the loans to be discharged in bankruptcy. Both these things need to be done together. This would put pressure on the issuer to determine the odds of having a loan paid back. When issuers look at questionable employment prospects they are not going to loan money, shuttering institutions like Cooley relatively quickly. Downward pressure on tuition would also be created because middle of the road schools would eventually be able to max revenue by lowering tuition - assuming the median student can get a loan for X the school can't charge much more than X.

I know this would mean less kids going to college, IMHO, not necessarily a bad thing.


This would have the tendency to prejudice low-income and minority students. The smartest ones would probably get full rides at local state schools, but it would ensure that only the wealthy could attend elite schools because private lenders might look to family income as much or more than future job prospects. This is only conjecture, but not completely unrealistic, given the nation's history with redlining and racist/classist homeowner's associations, etc.

I still think passing a version of this bill but adding a provision to kick back the unpaid portion of discharged student loans to the university makes more sense. It would shutter art history programs and TTT's in a hurry. It would place the social cost of wildly inflated tuition and unmarketable degrees on universities, rather than on students and society.

why wouldn't universities just admit wealthy students, then?

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Perseus_I
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Re: Hansen Clarke's Bill

Postby Perseus_I » Fri Jul 13, 2012 9:55 am

fatduck wrote:
Perseus_I wrote:
buckilaw wrote:This Bill would exacerbate the student loan mess, even more incentives for students to major in unmarketable degrees. And universities are still going to gouge prices through the roof.

You can fix the student loan mess by doing two things. First, the government needs to stop guaranteeing loans. Second, allow the loans to be discharged in bankruptcy. Both these things need to be done together. This would put pressure on the issuer to determine the odds of having a loan paid back. When issuers look at questionable employment prospects they are not going to loan money, shuttering institutions like Cooley relatively quickly. Downward pressure on tuition would also be created because middle of the road schools would eventually be able to max revenue by lowering tuition - assuming the median student can get a loan for X the school can't charge much more than X.

I know this would mean less kids going to college, IMHO, not necessarily a bad thing.


This would have the tendency to prejudice low-income and minority students. The smartest ones would probably get full rides at local state schools, but it would ensure that only the wealthy could attend elite schools because private lenders might look to family income as much or more than future job prospects. This is only conjecture, but not completely unrealistic, given the nation's history with redlining and racist/classist homeowner's associations, etc.

I still think passing a version of this bill but adding a provision to kick back the unpaid portion of discharged student loans to the university makes more sense. It would shutter art history programs and TTT's in a hurry. It would place the social cost of wildly inflated tuition and unmarketable degrees on universities, rather than on students and society.

why wouldn't universities just admit wealthy students, then?


Some already do, unfortunately. But the difference is universities are supposed to admit students solely based on academic and professional potential. Ability to pay ought to be completely irrelevant. Loan companies, on the other hand, are SUPPOSED to discriminate on the basis of family assets and credit history; it's neither fair nor realistic to expect them to do otherwise. It's one thing to send the DOJ after a university that engages in fishy admissions practices. It's quite another to send the DOJ after loan companies for simply doing their job.




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