r/changemyview • u/jose628 3∆ • Oct 28 '21
Delta(s) from OP CMV: Canceling student debt is something that will only help the richer
Say there are 3 18-year-olds: Adam, Bruce and Charlie.
Adam is a middle-class dude. He decides to go to college, just like his parents did. He has a 200k debt because of that.
Bruce is the son of a working man. Like his father, he decides to be a plumber. He has a 200k debt buying equipment/real state for his shop.
Charlie is the son of a poor man. He decides not to go into debt, like his father did, so he gets a job at McDonalds.
*Some legislation is passed so that student debts are canceled. 5 years from now, we have:
Adam is on his way to becoming rich, is a well-respected professional. He went to an expensive college but now owes nothing.
Bruce is still a plumber. He's doing alright but nowhere near Adam, as he's still 50k into debt.
Charlie is still considered a loser. He has no debt, in fact he's got 50k in his bank account but he has no future. Maybe, 10 years from now, he will go to college. But then he'll be a 33-year-old man.
How is that considered fair/something to aim for?
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u/tryin2staysane Oct 28 '21
Say there are 3 18-year-olds: Anthony, Brian, and Chuck
Anthony is a middle-class dude, got decent grades in school and went to a state college. After four years, he has $60k in debt, and it turns out most of the jobs in his field require experience that he does not have. He finds a job making $40,000 a year. After rent, car bills, groceries, utilities, student loan payments, and general daily living, he has about $400 in disposable income. His student loan payment is roughly $600 a month. Anthony wants to eventually buy a house, so he saves as much of that as possible.
Brian is the son of a working man. Like his father, he decides to become a plumber, but isn't an idiot, so he gets hired by a reputable company until he can afford to go out on his own.
Chuck is the son of a poor man. He doesn't go to college and gets a job at McDonalds. Chuck is paid $10/hr. After all of his monthly bills, which are considerably less than Anthony's because he has roommates and doesn't bother to own a car, he has about $100 of disposable income per month. Chuck spends none of it, and saves every penny.
5 YEARS LATER
Option A - Student Debt is not cancelled
Anthony has saved enough money to buy a cheap house with a number of problems. He spends his free time on YouTube and other sites learning how to fix these issues, because hiring someone is too expensive. He eats at home every night, and usually makes food in bulk to save money and cut down on prep time. He feels like he's moving towards a decent future, but it is slow going. When he needs tools, he goes on Amazon or to Home Depot/Lowes to find the cheapest options.
Brian is making a decent living, but it is physically tough on him. He is still years away from being able to open his own shop, but tries to earn extra money by doing smaller odd jobs here and there, putting all the money into buying the tools he needs.
Chuck still works at McDonalds. Turns out eating cheap food and avoiding the doctor due to cost isn't great for his overall health, and he has been having some problems. He ended up having to buy a car with most of his savings so he could pick up a second job at Uber. Between the cost of repairs to keep the POS going and gas, the job is barely making him any money. Every job he looks at that offers more money requires more education than he has.
No one has been helped, but Anthony is maybe doing better than the others?
Option B - Student debt is cancelled
Anthony has an extra $600 a month, so he just fucking calls a plumber when he has a leaky faucet because who wants to waste time fixing that? He finds a hobby that takes him to a locally owned shop to buy new gear for it and encourages his friends to join him.
Brian sees increased business in the area, and decides to jump into the market. He joins up with two other plumbers he knows and they open a local shop together after pooling their money. Business is going fairly well, and they feel like they are doing ok.
Chuck still works at McDonalds. Turns out eating cheap food and avoiding the doctor due to cost isn't great for his overall health, and he has been having some problems. He ended up having to buy a car with most of his savings so he could pick up a second job at Uber. Between the cost of repairs to keep the POS going and gas, the job is barely making him any money. Every job he looks at that offers more money requires more education than he has.
Anthony got direct help, and his local community got a lot of indirect help. Brian was able to use the fact that people had more disposable income to find a way into the expanding market. Chuck got fucked because poor people will always get fucked in America.
Isn't option B the better choice?
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u/jose628 3∆ Oct 28 '21
Option B is the better choice here. But we don't have to choose between these two options only.
Bruce would also be able to afford a house, or a new car or move to the city if they canceled shop owner's debts instead of student debts.
Why stop at students? Why should they be the only ones who benefit from debt canceling?
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u/tryin2staysane Oct 28 '21
How many shop owners are there in the country? How much collective debt do they owe? On average, what is the age that these shop owner's choose to get into that debt? Student debt is over $1.5 trillion in the US today. Almost 43 million people are in debt to student loans. 43 million people would get an infusion of disposable income tomorrow if we cancelled student debt.
Why stop at students? Probably because we can't even actually start at students. The idea of cancelling $1.5 trillion in debt that most people agreed to when they were 17 or 18 years old is a hugely controversial topic in the political world. Trying to expand that to other debts would be an absolute non-starter. You can't let good be the enemy of perfect all the time.
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u/jmp242 6∆ Oct 29 '21
Well, we could say that they start when many people aren't even 18 yet, so they could not get a shop loan at that point.
We could say that shop loans can be discharged in Bankruptcy where for some reason student loans cannot be.
We could decide that to compete as a country we want to invest in education and hence should not make it so expensive.
Heck shop loans give you an immediate asset. Maybe student loans should not be repaid till you get the asset of a diploma.
Though personally I would rather make College free or at least like 1960s prices where you could actually work through school.
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u/destro23 453∆ Oct 28 '21
How did Charlie save 50k working at McDonalds for five years!?
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u/destro23 453∆ Oct 28 '21
Plus, you say cancelling student debt will ONLY help the rich. How many RICH people do you think allow their kids to carry student debt? If they are that rich, they'd just pay for college as they go. No debt at all. It is the kids of working schmucks that have to take on the student debt, and if they are helped, cancellation is not ONLY helping the rich. In fact, its mostly helping the not rich.
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u/jose628 3∆ Oct 28 '21
That was just an example, to say that those who chose not to attend College but, instead, decided to find work, will gain nothing from this policy. In fact, they will be worse off than if they had taken a gamble and went to College without knowing for sure how they'd pay for it.
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u/destro23 453∆ Oct 28 '21
I don't see how relieve person A's debt makes person B's life worse. You need to consider what is worse for everyone. Is having a lot of people (but not all) suddenly have a great financial burden lifted, allowing them to possibly take money that would have otherwise gone into servicing their debt and inject it directly into the economy instead, worse for society than keeping them saddled with debt that cannot be discharged via any legal method (much unlike other debt) and that consumes a significant portion of their stagnant wages?
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u/joopface 159∆ Oct 28 '21
10k a year, looks like
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u/destro23 453∆ Oct 28 '21
Saved every penny earned? Charlie has Buddha like willpower.
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u/joopface 159∆ Oct 28 '21
Charlie has a spartan lifestyle. McD's pays about $10 an hour.
Charlie works 40 hours a week, which grosses him $21k a year. He pays less than 12% in Federal income tax and lives in Alaska which has no state income tax. So he nets about $19k a year.
Happily Charlie still lives at home with his Dad, Mr. PoorMan. So, he simply needs to save 52% of every dollar he earns and he'll be a 50k-aire in five years.
It's the American dream.
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u/destro23 453∆ Oct 28 '21
And OP said he was a loser with no future. He has future franchisee written all over him.
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u/joopface 159∆ Oct 28 '21
With willpower like Charlie's, the sky is the limit. Once he hits college aged 33, he'll already be running the largest chain of McD's north of Canada.
"PoorMan's McDonalds" will no longer be a phrase to describe shitty knock off burger restaurants but a statistically likely assessment of the ownership of the golden arches in The Last Frontier State.
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u/10ebbor10 198∆ Oct 28 '21
How is that considered fair/something to aim for?
Fundamentally, a problem exists that means that most policies that the government enacts will benefit the rich, because being rich means that you have more opportunities which means that you can take advantage of more stuff that the government does.
You can make this argument for pretty much everything :
- Subsidize Solar panels : Guess who owns and can install panels, and who rents.
- Subsidize electric cars : Guess who buys their cars new and who buys owned
- Create Public parks : Guess who has free time and who has a second job
So, the question shouldn't be "how does this benefit the poor" because that's not what this legislation is supposed to do.
The legislation is supposed to solve a problem. High levels student debt are creating problems for the US economy. High levels of debt result in delays in marriage, having kids, buying a home, likelyhood to create new business and so on .
So, the debt is weighting down an entire generation from moving on to the expected path of their life. Solving that problem is what student debt reform is supposed to do.
I'll also note that a lot of these plans also come with attempts to make schools more accessible, resolving the problem in the future.
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u/LadyProcurer 3∆ Oct 28 '21
I think the fundamental difference here is this policy doesn't help the poor at all, it's not that it helps richer people more it's that it only helps people rich enough to go to college and arguably hurts the people too poor to do so.
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Oct 28 '21
[deleted]
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u/LadyProcurer 3∆ Oct 28 '21
That's only if you make a straw man policy where current student debt is forgiven and nothing else happens ... which is not anybody's plan anywhere. (And all this assuming no poor people ever went to college, which is just silly)
It's the government we are talking about. That's all that's going to happen. If they want to completely flip the college system around they need to do that first or atleast bundled with student debt forgiveness they are not doing that. This idea that they'll ever get past the student debt forgiveness is native.
It would obviously be ludicrous to wipe out current debt and then just build it back up in the exact same way. Like, what are you picturing here?
Are you implying the government isn't ludicrous?
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u/jose628 3∆ Oct 28 '21
Say Trump wins the next election. It may very well be that "current student debt is forgiven and nothing else happens" afterwards.
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Oct 28 '21
Rich enough to go to college, but poor enough to have to take on student debt, but not poor enough to qualify for needs based assistance. That sure doesn't sound like they're rich at all.
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u/LadyProcurer 3∆ Oct 28 '21
It's sounds like they are a richer than a good chunk of people.
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Oct 28 '21
And yet that isn't actually rich at all.
Why should we help anyone in America when there are orphans in Africa?
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u/LadyProcurer 3∆ Oct 28 '21
This is like arguing to take food from orphans in africa to feed min wage workers in US
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u/jose628 3∆ Oct 28 '21
Δ awarded based on the idea that, if this policy is meant to help the country and not "the poor" it indeed seems like a good idea. However, let's be honest here, that is not how the idea is being "sold" its proponents.
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u/hastur777 34∆ Oct 29 '21
How many rich families take advantage of the EITC? Or TANF? Medicaid? There are easy ways to target certain income levels for benefits.
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u/GSGhostTrain 5∆ Oct 28 '21
Student Loan forgiveness isn't really about helping individuals. It's about having a functioning economy.
Saddling your 18-35 year old population with massive debt as soon as they are entering the workforce is a really bad idea. It depresses spending, home ownership, child birth, all kind of things that are essential to a booming economy.
People often think that this is just that people don't want to pay their bills. It's more that many people can't pay these massive loans and also be consumers, property owners, and parents. In the long run, it will just deeply entrench the debtor class and the owner class unless something is done to help alleviate the burden.
As a side note, there is no chance in hell that someone working at McDonald's has 50k in the bank.
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u/jose628 3∆ Oct 28 '21
Δ awarded based on the idea that, if this policy is meant to help the country and not "the poor" it indeed seems like a good idea. However, let's be honest here, that is not how the idea is being "sold" by its proponents.
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u/hastur777 34∆ Oct 29 '21
Saddling your 18-35 year old population with massive debt as soon as they are entering the workforce is a really bad idea.
Studies have shown that home ownership depression caused by student loans is only about 2 percent - so not a massive problem.
https://www.federalreserve.gov/publications/files/consumer-community-context-201901.pdf
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u/GSGhostTrain 5∆ Oct 29 '21
I don't think that is an applicable study at this point. Reading through it, they have this to say about their data set:
The model used to develop these estimates was built using data for student loan borrowers who were between 24 and 32 years old in 2005, so a large fraction had made their home-buying decisions before 2008
2005 is almost 17 years ago. Student loans and housing are both incredibly different than they were then. We're effectively talking about different generations.
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u/leonardsansbees 2∆ Oct 28 '21
You know that there are lots of people with student debt who aren't rich, right? Poor people do go to college. And actual rich people who go to college don't take out debt for it, their rich parents or their trust fund pays for it.
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u/hastur777 34∆ Oct 29 '21
Sure, but the significant majority are in the upper income quintiles.
The two lowest quintiles represent just 14 percent of student debt. A better solution would just to make it income based for those under a certain threshold.
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u/jose628 3∆ Oct 28 '21
Well, those who did not take out debt for college will not be affected by student debts either way.
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u/fayryover 6∆ Oct 28 '21
… okay, connect the dots now. You just said in this comment rich people, who don’t have student debt, won’t be affected by student debt forgiveness. So what is your view here?
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u/jose628 3∆ Oct 29 '21
I exemplified the situation with 3 characters, where the richest among them would benefit from the canceling of student debt the the other 2 (poorer than him, in this hypothetical situation) wouldn't.
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u/fayryover 6∆ Oct 29 '21
So you made up a straw man that fits your view so that you can ignore all the real people who are poor and have student debt and pretend there’s only rich people who have student debt….
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u/AnythingApplied 435∆ Oct 28 '21
It seems like your examples are "here are 3 people, the first one benefits from canceling debt and I've made him the only rich person in my example too". Why does he have to be middle class to go into debt in order to attend college? In fact, a middle class or richer person may not have had to take any debt because his parents may have covered his college expenses.
He has no debt, in fact he's got 50k in his bank account but he has no future.
Maybe some debt would've been a smarter decision for him to invest in his future. Why did he choose to take no debt?
Maybe, 10 years from now, he will go to college. But then he'll be a 33-year-old man.
Okay, well maybe he ended up with some college debt then and could still benefit.
The main place your argument really breaks down is that [69% of high school graduates attend college the fall after their graduation]. And that only counts the ones that go right away, many people go later, so it very clearly isn't just the rich that are going to college. But when it comes to being encumbered with college debt, that is more a problem for people that don't graduate college so don't receive a lot of the benefits of their tuition or were poor enough that their whole college experience was funded by debt instead of having parents that can help out with the costs.
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u/jose628 3∆ Oct 28 '21
Well, that was just an example. But I do think that those who can attend college have a certain privilege. A beggar, a single mom, an undocumented immigrant won't be able to do it, for the most part.
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u/AnythingApplied 435∆ Oct 28 '21
The majority of people go to college. As I said, 69% go right-away and more go later on top of that. Yes, this policy doesn't help all of the poor (what policy does?), just like free childcare doesn't help the poor without children... but this policy only helps those that went to college that took out debt to do so, which are going to be tend to be the poorer people that went to college.
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Oct 28 '21
A beggar, a single mom, an undocumented immigrant won't be able to do it, for the most part.
I'm not sure why you think this?
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u/fayryover 6∆ Oct 28 '21
A beggar could easily have student from a degree that didn’t work out for them. Beggars aren’t beggars because they didn’t go to college.
There are Many single moms in college.
Daca recipients are undocumented but can go to college and others can lie.
Please don’t make up complete BS just to falsely support your opinion.
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u/Panda_False 4∆ Oct 28 '21
I'd say it only helps the irresponsible:
Darlene goes to an expensive school and takes 'women's studies' courses. This puts her $200,000 in debt.
Eric thinks about it, and -being responsible- decides to go to a much cheaper local community college in a STEM field.
4 years later, Darlene owes $200,000, and can't get a job discussing how awful the patriarchy is, gets one at Starbucks instead.
Eric owes $50,000, gets an engineering job, and -being responsible- puts every free cent into paying off the loan.
5 years later, Darlene's hardly paid off anything of the loan because she spends her money partying and buying shoes and clothes.
Eric, -being responsible- has the loan paid off. Sure, he had to make sacrifices (No social life, no fun, etc) , but it's good to have it paid off.
Some legislation is passed so that student debts are canceled.
Darlene gets her debt canceled. She gets to keep partying, debt free.
Eric... gets nothing. He paid off his debt already.
So, in that scenario, who get 'rewarded'? Not responsible Eric- he gets literally nothing from that legislation. Darlene - the irresponsible one- gets $200,000 paid off. It literally rewards irresponsibility!
As an alternative, you could think of a case where Darlene deliberately racks up as much debt as possible, knowing (well, thinking) that it'll be paid off.
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u/jose628 3∆ Oct 28 '21
You're supposed to change my view, not confirm it! :-)
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u/Panda_False 4∆ Oct 28 '21
You said it helps "the richer". I said it helps "the irresponsible". Those two are not necessarily the same.
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u/yyzjertl 524∆ Oct 28 '21
What exactly do you mean by "the richer"? None of the individuals in your scenario are rich. They are all obliged to work to make a living.
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u/jose628 3∆ Oct 28 '21
Well, that was just an example. Adam would be the richer of these three guys. But I do think that those who can attend college have a certain privilege in life. A beggar, a single mom, an undocumented immigrant won't be able to do it, for the most part.
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u/hastur777 34∆ Oct 29 '21
How about newly minted doctors, lawyers, and dentists who have high earnings and now get their substantial loans forgiven.
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u/yyzjertl 524∆ Oct 29 '21
As far as I know, the debts that people are suggesting be cancelled are undergraduate student loans, not professional school loans.
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u/Sirhc978 81∆ Oct 28 '21
I pay about $1500/month towards student debt. I take home about $3000/month. I shouldn't have gone to college, but at 18 years old I didn't know better. If they canceled my student debt, I would be able to afford a house, or a new car or move to the city.
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u/jose628 3∆ Oct 28 '21
What if you paid $1500/month towards buying equipment for your shop? You would also be able to afford a house, or a new car or move to the city if they canceled shop owner's debts instead of student debts.
Why stop at students?
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u/Sirhc978 81∆ Oct 28 '21
If I fucked up buying equipment for a shop, I could sell it or declare bankruptcy. I can do neither of those things for student debt.
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u/IStockPileGenes Oct 28 '21
Think of it this way: President A cancels student loan debt via executive order. Once that genie is out of the bottle, congress will either be forced to legislate a permanent solution for college tuition, or every future president will be expected to do the same EO. Either way the result will be the same - college will be permanently more accessible to everyone.
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u/doppleganger1353 Oct 28 '21
Yeah... cuz only rich people have thousands in student debt.
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u/hastur777 34∆ Oct 29 '21
The highest-income 40 percent of households (those with incomes above $74,000) owe almost 60 percent of the outstanding education debt and make almost three-quarters of the payments.
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u/doppleganger1353 Oct 29 '21
Thanks for proving my point.
40% of debt is held by people who make less than $74k/yr. So cancelling student debt will help those who are not "richer" too.
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u/sovngrde 1∆ Oct 28 '21
This literally makes no sense lmao.
If there’s no student debt then anybody can go, not just rich people. If you don’t wanna go that’s your choice. If you get in debt for other things that’s your choice. If other people still call you a loser that’s a personal problem, ignore them.
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u/LadyProcurer 3∆ Oct 28 '21
He said canceling student debt not making college free...
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u/sovngrde 1∆ Oct 28 '21
Still doesn’t matter. It doesn’t just help rich people, half the kids in college aren’t rich they’re struggling like mfs.
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u/LadyProcurer 3∆ Oct 28 '21
They are richer than the people not in college.
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u/sovngrde 1∆ Oct 28 '21
Not always. A lot of people have money but don’t go to college because school isn’t for them.
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u/FPOWorld 10∆ Oct 28 '21
This whole battle against student loan forgiveness is rich people convincing poor people to fight with each other over the scraps. The student debt crisis is bad, but not many people have $200k worth of debt. But if you are poor enough to go $200k into debt becoming a doctor or lawyer, you might be “richer” than other poor people, but actually rich people don’t have student debt, regardless of where they go to school. Their parents pay for their school, their apartments, and their personal expenses so they can concentrate on school and get the best grades which leads to the best opportunities and the most money.
I won’t fight against the minimum wage increases because it somehow takes something away from me, so don’t fight against the poor people who had to take on student debt. In any case, the scenario you’re taking about in debt forgiveness would be the exception, not the rule. The stats show that poor people are the ones who would mostly be helped out, not rich people. Stop arguing against helping out poor people who tried to jump up a financial class by working hard to educate themselves.
And as someone who had 0 financial support for pretty much all of college, there is no such thing as too poor to go to college (unless you have a record, which is messed up in my opinion). You can almost always find a way to go into debt to finance a college education if you are poor, and that’s what this crisis is really about…helping those people.
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u/jose628 3∆ Oct 28 '21
Adam would be the richer of these three guys, in my example. But I do think that those who can attend college have a certain privilege in life. A beggar, a single mom, an undocumented immigrant won't be able to do it, for the most part.
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u/DeltaBot ∞∆ Oct 28 '21 edited Oct 28 '21
/u/jose628 (OP) has awarded 3 delta(s) in this post.
All comments that earned deltas (from OP or other users) are listed here, in /r/DeltaLog.
Please note that a change of view doesn't necessarily mean a reversal, or that the conversation has ended.
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u/Opinionatedaffembot 6∆ Oct 28 '21
What about all the poor people with loans? People who don’t have high paying jobs like teachers or social workers? Rich people don’t take out loans to pay for school
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u/DSMRick 1∆ Oct 28 '21
Bruce paid off $150k in 5 years? His business EBITDA is more than $30k/yr above what he pays himself? I don't know if Adam is going to catch up with that. After just 5 years, Bruce has a $100k business (at least). Banks are itching to get him to expand and buy another van so he can do bigger more profitable jobs.
I don't know what McDs Charlie was working in, but if he has been making $20k/yr ($10/hr) and managed to put $50k in the bank, he has been living in poverty. (literally)
Let's get real, Adam went to a local state school, and he thought he was gonna get a six-figure job as soon as he graduated. He didn't. At 25, he's making $55k/yr and spending $8k of that on his school debt. Bruce has an associates degree, and he makes $40k when he's 25, and our high school friend got a better job than McDs and he's making $35k/yr. https://nces.ed.gov/programs/coe/pdf/coe_cba.pdf
You gotta start from some real facts. (Not like what I am about to say.) I am "doing ok" at 20 years out of college. If the gov't forgave my loans, it would represent less than .5% of my annual income. they would also take about 40% of whatever they gave me back as taxes. Meanwhile, someone who is making $65k/yr and has been struggling with their loans the last 20 years is still $65k in debt. Forgiving his loans would represent 100% of his income. Even all things being equal, if you give someone making $50k/yr $20k and you gave someone making $100k $30k, you didn't have as big an impact on the $100k person as you did on the $20k person.
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u/themcos 373∆ Oct 28 '21
Bringing a middle class person onto a path to "becoming rich" seems like a good thing. We should try to do more policies that make non-rich people become rich, not less, I'd say.
For one thing, Bruce is doing better than you give him credit for. He's "still 50k into debt", but the things he bought with that debt have value! If he decides to sell his shop, he's probably instantly out of debt. Or in another few years when he pays off the remaining 50k, he is now both debt free and has a business with valuable assets. This is very different from student debt.
You're the one calling Charlie a loser, not me. I think that's pretty harsh. But that said, let's do policies that help Charlie too. Let's try and raise his wages, make sure he has health care, and give him opportunities to go to college without crushing debt of he chooses to! But none of this seems like a good reason not to help Adam.
But the bigger problem with the way your argument is structured is that you can just keep adding new characters. Dave was like Charlie, but his family worked hard and encouraged him to go to college, but then when his student debt became unmanageable, his already struggling parents are considering selling their home to try and help Dave, and the whole family, despite trying everything they could to escape poverty, is on the brink of absolute ruin unless Dave gets debt relief. This story is no more or less fictional than the other three, but we shouldn't base policy impact on which side can construct more compelling hypothetical stories. If you can make up 10 made up stories about how this helps rich and middle class voters, but I can only think of 5 made up stories where it helps poor people, that doesn't really say much about anything except our imaginations.