Quote:
Originally Posted by Returning2USA
Is this "Debt Jubilee" possible with some debts or is this just more campaign cycle false promises?
Elizabeth Warren says she’d cancel most of the $1.6 trillion in U.S. student loans. Bernie Sanders would go further -– erasing the whole lot, as well as $81 billion in medical debt.
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That's called Propaganda and Disinformation. Let's start with Warren's lies.
First, that $1.6 TRILLION in student loan "debt" (snicker) is the total amount owed on outstanding student loans from 1976 through the present.
What Warren wants you to believe, is that a single Generation, namely the "Millennials" are saddled with the entire $1.6 TRILLION and that it is somehow damaging to the economy.
That is a lie.
That "debt" (snicker) is owed by the Silent Generation, Boomer Generation, Tweener Generation, Generation X-Box, the Millennials and Generation Z, because some people in all those generations borrowed money through student loans, ostensibly for educational purposes.
There are currently 3+ Million Social Security Retirement beneficiaries whose monthly benefits are garnished at 15% to pay for the student loans they have not repaid and which they borrowed in the 1970s and 1980s.
The next lie that liar Warren tells is the debt itself. The student loan "debt" is:
Principal + Collection Fees* + Interest = $1.6 TRILLION
If you recall, the Department of Education was previously the Department of Health Education & Welfare (HEW as it was known) until it became a separate entity. If you review the budget through 1976, a total of $1,550,922,884,061 was authorized/budgeted for student loans.
However, that amount is not outstanding.
Only 5.2 Million borrowers are in arrears but 75+ Million Americans from 1976-present have borrowed student loans and repaid them in full, or otherwise settled the amount.**
Depending on the year, the default rate generally ranges from 10%-12%.
Note that the default rate for credit cards is about 6%, the same for auto loans, and about 4.5% for mortgages.
The default rate for student loans is certainly higher, but not incredibly so.
Much attention is paid to cohort default rates and institutional default rates.
That, was created as part of a propaganda and disinformation campaign to disparage "for-profit" schools.
Yes, students at for-profit schools have a significantly higher default rate. In fact, ~44% of the students in any cohort that defaults attended for-profit schools.
Let's analyze that. Why?
What do for-profit schools do? Make a profit. No, that is not why.
Who do for-profit schools target?
Low income.
That should be obvious. For-profit schools advertise on non-network TV, you know, like the CW, ME-TV, Heroes & Icons, BET, ION, LAFF and Bounce.
Where I live, Beckford College runs ads for medical assisting, dental assisting, medical coding, nursing assistant, etc.
What can you say about those jobs? They're not exactly high-power high-paying jobs.
The low-income people they target would be shot if they ever attempted to set foot on a real college campus, because they never graduated high school, or have a GED, or never took the ACT/SAT and if they did take the ACT/SAT their ACT score is probably "2" and their SAT score is "92."
Low-income families are financially illiterate and have no money management skills and are typically one-parent households on welfare.
What money management skills does a low-income student learn growing up?
Bling, drugs, alcohol, dope, lottery, gambling, tattoos and cell-phone minutes (not necessarily in that order).
So.....you're going to take someone who is financially illiterate and educationally illiterate who will end up in a low-paying job and you're going to loan them money?
How dumb is that?
That is a recipe for disaster.
What's the difference between a low-income student and a chimpanzee?
The chimpanzee is more likely to repay the student loan (albeit in bananas).
Your State legislatures are largely responsible for that. Case in point: day-care in Ohio.
Day-care in Ohio averaged $3,500/year until the State legislature in its infinite wisdom mandated that you must have a 1 year certificate or Associate Degree to work in day-care.
What did that do? At the stroke of midnight when the law went into effect it slashed the Supply of Labor for Day-Care by 90%.
When Supply decreases and Demand remains constant or increases, prices rise and in this instance the price is wages for day-care workers.
Now it costs $9,800/year for day-care which is $400 more than 1 year tuition at the University of Cincinnati and your child is being educated by someone with a "certificate" and not full-professor.
How dumb is that? Well, that's how special interest groups and lobbyists totally screwed everything.
Many day-care workers don't have the time for college, or don't have the money for college, or could never get admitted to a college, or if they did have the time and money and could get admitted, they would seek a degree/certification in a different field that was more rewarding or paid more (or both).
Of course, there's always for-profit colleges who'll take anyone.
Really, a student loan to get a certificate or AS in day-care? Are you for real? What a waste of time, money and resources.
Do you really need college to be a Certified Nursing Assistant (CNA) and work at a nursing home?
You need college to change bed pans?
No, you do not.
That's what On-the-Job Training (OJT) is for.
Look, we as a society bear those costs one way or another, so which costs society less, college or OJT?
OJT. Pay a training wage -- yes, it might be less than minimum wage -- and specify a relevant time period -- 90 days, 180 days or 1 year -- then do an evaluation. Either they'll get it, or they won't and if they don't then terminate their employment (without cause for the employer) and then get them tested to be certified.
So, low-income people get hired right away and earning money while being trained and if successful they'll get certified without spending money for college and without soaking the tax-payers on student loans.
That also frees up student loan money to be used by other students in fields that really do require college.
Anyway, 5.22 Million are currently in default. There are 128 Million households in the US.
That 4% of households. If you think 4% of households is going to crash your economy then you need to REDO FROM START ECONOMICS 101.
And then there's this and, yes, Christen is her real name:
Christen currently has well over $225,000 in student loans. (Id. at 51); (Ex. 3-1 to 3-3). Christen estimated that $128,453 in student loans were directly attributable to living expenses
Christen used student loan money to purchase at least two vehicles—one of which was titled in her boyfriend's name. (Tr. at 64, 206) Christen's bank statements also evidenced financial irresponsibility. Christen spent much of her student loan money purchasing coffee from high-end coffee shops like Starbucks, Caribou, and Cup O'Joe; products and clothes from retailers; I-tunes; tanning sessions/products and massages; arts and crafts; OSU athletic tickets; and other food and entertainment. (2006 Chase Bank & Credit Card Statements, P's Ex. 7). Christen also made several ATM withdrawals for several hundred dollars at a time; it is unclear where this money was spent. (Id.). After reviewing all of the financial records, it is clear that Christen was spending more than the typical student on miscellaneous items and services, often incurring late fees for failing to keep up with her credit card bills. All of these expenses were in addition to the high living expenses that Christen incurred by choosing to live in Dublin, Ohio, an affluent suburb of Columbus.
[emphasis in original]
And, yes, nearly everyone does that. Do they do it to the extent that Christen did? No, not every student bought a car for their boyfriend/girlfriend and not every student bought a car for themselves, but few students spend 100% on education.
Student loans should be capped at the cost of tuition for the year for the institution the student is attending and maybe 0.5% extra for books/lab stuff.
So....the "student loan crisis" is a phony crisis manufactured by Liberals, and especially Warren
et al.
Regarding Bernie and his $81 Billion in "medical debt" (snicker), how do we know that debt is even real?
This is typical of the problem:
Wills v Foster 229 Ill. 2d 393 (2008)
The plaintiff owed
$80,163 in medical bills but the hospital accepted an insurance company negotiated settlement of $19,005
in full satisfaction.
Let's be clear on the concept here.
The hospital billed $80,163, not the insurance company.
The insurance company is the hero here, because they did a tremendous favor to everyone by negotiating a settlement of $19,005.
That happens 24/7 in America. Hospital bills $110,000; insurance company settles for $26,000. Hospital bills $33,000; insurance company settles for $9,000. Hospital bills $214,000; insurance company settles for $72,000.
Why in the hell would you ever allow a system like that to perpetuate?
Someone explain it to me:
Why do you think that is so fantastic?
Again....I ask....how do we know for sure that $81 Billion really exists?
Hospitals are monopolies. All monopolies are bad. Period.
The American Hospital Association (AHA) bribed and goaded your State legislature into enacting the "enabling laws" and other laws which allow hospitals to operate as legal monopolies.
The AHA lobbyists swore up and down on a stack of bibles that the free healthcare hospitals give to low-income patients would offset the very negative and extremely damaging consequences of hospital monopolies.
Call your Statehouse or State representative and ask them to e-mail you a copy of the report that shows how much free healthcare the monopoly hospitals in your State have provided to low-income patients at any time in history.
You'll die before you ever see it.
The AHA lobbyists who wrote that legislation made damn sure there would never ever be any reporting requirements to any State agency or office.
The few States who tried to enact legislation later to force hospitals to report got shot down by AHA lobbyists bribing and goading your State representatives.
You all need to demand that your State legislators repeal the laws that grant hospitals monopoly status and for any State legislator that balks, I guarandamntee you they are getting campaign funding from the AHA.
Congress could enact a law that says if States don't repeal those laws, then their Medicaid funding is withheld for the entire fiscal year.
Once you end the monopolies, the cost of medical care in the US will drop 30%-60% literally overnight, and your health plan coverage will decrease 30%-60% as well.
The AHA is attacking Trump's price transparency rules, because the AHA doesn't want you to know how badly the hospitals have been totally screwing Americans for the last 80 years.
We'll see where it goes.
*
Collections Fees were unlimited prior to 1995. A debt collector could charge whatever they wanted under the law, which permitted the charging of debt collector wages/salaries as fees. So, you owe $14,000 in 1994 on student loans in arrears and it's assigned to a debt collection agency who assigns it to one of their debt collector employees who earns $38,000/year. Your student loan debt is now $14,400 + $38,000 = $52,400. In 1995, Congress changed the law to limit collection fees to 26% of the outstanding balance at the time of collection. In 1998, Congress reduced the maximum collection fee to 22%. In 2003, Congress reduced the maximum collection fee to 20%. However, none of the reductions are applied retroactively.
** The Department of Education only accepts three settlement options:
1) you pay 90% and 10% is forgiven and you get a 1099-MISC and must declare that 10% of the principal as income and pay federal and State taxes on it; or
2) the collection fees are waived and you pay the full principal and interest computed without collection fees; or
3) you pay 100% of the principal and collection fees and 50% of the interest is waived.
Option 3 is usually the cheapest/most economical for borrowers in default for long periods, while options 1 & 2 are usually best for borrowers whose loans have been in default for short periods. Note that all settlement options require cash-up-front.
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