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At the college I attended years ago, they had a program called the second chance program. For people who dropped out of school and ended up with debts to the school (not FAFSA), the second chance program would allow you to reenter school. If you stuck to a program, didn't transfer, and graduated within an established period of time, your debt to the school was forgiven.
My wife and I dropped out of school and then thought better of it after a year or so. I was able to reenter under that second chance program and graduated with my bachelors degree. Later when my wife tried it, the program had been scrubbed. She has an unfinished degree and owes money directly to the school along with financial aid. I have my degree, owe no money, and have a good office job now. That probably cant be considered fair.
So many things are unfair. People who lived in the 1920's when alcohol was illegal. Or even now, imagine going to jail over marijuana possession, only to have it legalized in your state a few months later. You are a convicted criminal while your stoner roommate is considered to be living within the legal boundaries.
To answer your debt fairy comment. Some people are just going to get screwed. Some people are going to pay off their debt only to find others getting forgiven of theirs a month, a year, a decade later.
In case you didn't know, life is not fair. Some people benefit, some people won't. Some people are given million dollar inheritances, others die from cancer before their tenth birthday.
This jubilee would be a boon to some and a bane to others. But hey, such is life.
Sorry, but the fact that the same folks who paid their own debts will be the same people whose taxes are used to give a freebie of tens of thousands of dollars to deadbeats. It's beyond the level of unfair, and becomes, to anyone with a sense of responsibility, unconscionable. Maybe you would like to sign up to personally pay the debts of a few recent college graduates who have things they'd rather do with their money than pay their own bills????
Sorry, but the fact that the same folks who paid their own debts will be the same people whose taxes are used to give a freebie of tens of thousands of dollars to deadbeats. It's beyond the level of unfair, and becomes, to anyone with a sense of responsibility, unconscionable. Maybe you would like to sign up to personally pay the debts of a few recent college graduates who have things they'd rather do with their money than pay their own bills????
Maybe but the promises from the politicians are designed to appeal to a portion of the population. In our current political climate outrageous promises and claims seem to be the norm.
The problem is that someone's pension check or 401K investment is on the other end of that debt, so that if we declare all of it null and void, then poof, there goes everyone's retirement income. Plus, what about the responsible people who actually PAID their debt? Do they get anything out of this idea? Weimar Germany did something like this through hyperinflation, and it did not turn out so well.
I take it she wasn't a math major... Supposedly educated but can't run a financial calculator? They are free online. I do not feel sorry for this person at all.
Economics is all about the unintended consequences of things that sound one way on paper, and I wouldn't expect this to be any different. As a matter of aggregate economic impacting, there is something to be said for the possibility of a giant shot in the arm to consumer spending. We should want the next generation to always have a viable path to home ownership and the subsequent wealth building. If we're okay with cutting that off at the arm, we're essentially kneecapping the country's future prosperity, which nobody should want.
Of course, it's not worth all the trouble if we just wind up with the same problem ten years after hitting the "reset" button. That's where the "unintended consequences" bit comes into play. I would want to see a whole lot more studied around the behavioral incentives as altered by a policy like this, etc.
I think there's ample room to start with low hanging fruit, such as the more ghoulish for-profit universities that essentially lied about themselves and preyed on the vulnerable, saddling them with useless debt. Give people a path to start over on those kinds of obligations, while simultaneously salting the earth on these hucksters so it doesn't happen again.
The "I paid my debts and everyone else gets a freebie" concern would be directly relevant to me. I've put a big priority on killing off debt ASAP, making as much as double the minimum payment at times. If a student debt jubilee happened in the next (say) couple of years (it won't) I'd miss out on the chance to benefit by even $1 with almost perfect precision.
If that were the only consideration (it isn't, as I hope the above makes clear) I would say bring on the jubilee anyway. It's the sunk cost fallacy. I wouldn't have any sour grapes over the time I spent demonstrating to myself that I can crush debt ahead of schedule and inculcate a reasonably frugal lifestyle in the process. Not to mention, a society in which my peers are unchained from debt benefits me secondarily even if the benefit is intangible.
Explore it, and even clinch ASAP the low hanging fruit re: the seedier for-profit univs (hasta la eventual vista, DeVos), but do it only if there's a deliberate approach to preventing history from repeating.
Debt is never "erased," it is merely transferred. A student debt "jubilee" would only further bankrupt this nation. But hey, for anyone who thinks this is a sensible idea, why stop at student loans? Let's have a jubilee for mortgage debt, credit card debt, and auto loan debt too!!
Nobody is going to wipe out student debt, get serious, it stays with you for life.
Want an example?
A friend of mine took out loans for all 3 of his kids to go to college. Government student loan programs. That was 25 years ago, he never paid them back a dime. Come retirement time, he sadly discovered the federal government took 15% of his SS check every month to repay the student loan debt and will until it's paid off (if he lives that long). They never forget, and they never forgive.
Nobody is going to wipe out student debt, get serious, it stays with you for life.
Want an example?
A friend of mine took out loans for all 3 of his kids to go to college. Government student loan programs. That was 25 years ago, he never paid them back a dime. Come retirement time, he sadly discovered the federal government took 15% of his SS check every month to repay the student loan debt and will until it's paid off (if he lives that long). They never forget, and they never forgive.
Good. He should have paid his debts.
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