biden over promised on student loan forgiveness.

[EPW]

There's a big ****ing difference. Namely that these are 18 year olds who don't know what the **** they doing and are being pressured by everyone around them to go to the most prestigious college possible. But I know everyone on the right has a complete lack of empathy so you'll never understand.

[My Wife Hates CIV]

no it should not. but he does not get to keep all the equipment he bought. this is what i am talking about. default on your student loan. but you give up the degree. use it in the future on a resume... you take on the loan again with interest - and penalties. take a credit score hit too - and i would consider this 'student loan forgiveness'.

[Dauphin]

Given that university educate individuals usually command higher salaries than the uneducated, one would think the additional income tax revenues would be a strong inducement for governments to invest in education of its long term resident population.

BTW, are US student loans repayable based on a term schedule (same amount regardless of current income), or are they treated as an extra 'tax' on income over a certain amount until the loan it is repaid - meaning you pay it off faster if your income is higher?

[Jon Miller]

PLATO's simple tax plan:

1.) No income tax on businesses (It causes prices to be increased and is actually regressive).
2.) First $71,602 in personal income exempt from income tax (2 times poverty rate from previous year).
3.) All income above #2 taxed at flat rate. All income above $400,000 taxed at 2 X flat rate (Who came up with $400k as a number for the "rich" anyway?).
4.) Flat rate in #3 set once budget approved to fully fund budget.
5.) Budget must be approved by 10/31 of year prior to tax year or continuing resolution plus inflation rate will apply.
6.) Supplemental funding not in budget to be amortized over 30 years and amortization must be fully funded each year.

Shoot me down!

I think we could come to something reasonable this this approach.

In 2021, according to https://www.statista.com/statistics/...rsonal-income/ personal income in the US was a little over 21 trillion. In 2021, it looks like the US government spent about 6.8b. So let's say that the total needs to be 30%.

Instead of using $400k for rich, let's use 1%. The 1% (By income) bring in 20% of the total income. I would expect that the 49% that make more than $70k (which is about median for household income, we can just use median). The bottom 50% currently make about 12% of the US income ( https://stonecenter.gc.cuny.edu/the-...united-states/ maybe 13%).

So 20% at 2x for 1%
And 68% at x for 49%

It is going to be roughly 30% for the middle class and 60% for the wealthy. Seems reasonable, the US government is spending a lot.

One issue is that most government debt has ended up going away, at least in part, due to inflation. I guess that isn't how we have to run things.

I currently make a decently high income, but still a ways to go to reach the 1% (which seems to be closer to $600k than $400k). If we had three rates (for 50-90, 90-99, and 99+) it might be better. I wouldn't necessarily be against four rates (20-50, 50-90, 90-99, 99+), I think it is useful for most people to be involved in the country.

With 4 rates, it would be probably something like 10% for 20-50% (for a contribution of 0.2t), 20% for 50-90% (for a contribution of 2.1t), 40% for 90-99 (for a contribution of 1.7t) and 60% for 99+ (for a contribution of 2.5t).

JM

[Jon Miller]

Given that university educate individuals usually command higher salaries than the uneducated, one would think the additional income tax revenues would be a strong inducement for governments to invest in education of its long term resident population.

BTW, are US student loans repayable based on a term schedule (same amount regardless of current income), or are they treated as an extra 'tax' on income over a certain amount until the loan it is repaid - meaning you pay it off faster if your income is higher?

You can usually make arrangements to pay, based on income. You can always pay more. The government ones are pretty lenient. They will reduce how much you pay to some very small fraction, based on your income, and can possibly be less than the interest. This pushes out the completion date.

The default is 10 years. A lot of people don't make a high enough salary right out of college where paying it off in 10 years makes sense.

Back in Bush or Obama time, they made a rule that if you were working in the right sort of jobs (teachers/etc) that they would forgive after 20 years or something. I know a lot of people who tried to use that, but had significant bureaucratic barriers. I heard that at least a few years ago, that some really small percentage of the people who could be receiving the forgiveness actually were receiving the forgiveness.

JM

[Jon Miller]

this is what i dont get. why is a student loan any different from any other loan. what happens if you stop making car payments? what happens if you stop making your house payment? why is this student loan thing different. you signed an agreement. you got something for it. you now have to make the payments. AND! why does no one ever say - you must give up your degree if you default???? why is this different? is this liberal thinking? thinking that makes no sense. think about it - i know thats hard for liberals.

Student loans are different than other loans.

If you go bankrupt, your debt goes away.

Student loans can't go away, even if you are bankrupt and have no assets and no way to get enough income to pay off your debt in any reasonable fashion.

Note that some of the reason that interest is motivated is that there is a risk that the debtor won't repay. That is why rich people often pay effectively 0% interest on their loans, and the poor can pay crazy amounts over 600%. While student loans generally do have lower interest rates, they can still be near 10% which is really high for a loan which in the past never could go away except with death (I would expect).

JM

[Jon Miller]

I personally was really happy with no interest for a couple of years. That really helped me pay down my loans, which I couldn't make progress on for a number of years (I graduated graduate school over 13 years ago).

I make too much to get Biden's forgiveness.

I know a lot of people that forgiveness would help a ton. I personally would be really happy with just continued no interest, but am thankful for the period with no interest.

JM

[PLATO]

I see that many are talking about the extra income that is derived from getting a degree. I would imagine that most (but certainly not all) of the defaults are due to people who never got a degree. A couple of years in school and dropping out could easily cause an unsustainable situation. I do like that the gov't provides an income driven repayment plan, but I don't like that interest continues to accrue even if the payment is zero.

PLATO's Simple student loan repayment plan:

1.) Degree earners pay percentage of income upto amount needed to payoff debt (with interest) in 10 years. If percentage of income used is insuffecient, then balance of loan is forgiven at ten years. Payment rate set by adjusted gross income from previous years tax return.
2.) Non-degree earners pay according to current IDR guidelines. If income is insufficient to make fully amortized 10 year payment, then interest accrual is waived. Any balance still on the books at ten years is forgiven.
3.) Members of the military and peace corp pay no interest regardless of degree status as long as they are in the military, but otherwise subject to both 1 and 2 above. (Thank you for your service!)
4.) Payment avoiders who take no action will have a liability added to their federal income tax record to be paid down with any potential refunds. This debt would not expire. (Motivation!)

[Jon Miller]

I believe that people like teachers and so on would also often have trouble. I think that your plan would probably work for them.

JM
(I know that I was bouncing between minimum and forbearance for most of my decade in academia.)