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Old 06-18-2020, 07:12 PM
 
724 posts, read 541,062 times
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Could a cancelation or significant reduction in student debt over the next couple of years for working adults, effectively provide a boost to the housing market and also spur entrepreneurship on the heels of the economic effects of the Covid shutdown?

Curious to hear some of the pros/cons of this idea.




WSJ article below:

"Student loans prevented 400,000 young Americans from buying homes, Fed says in paper covering 2005 to 2014"


https://www.wsj.com/articles/fed-say...et-11547657473


https://www.businessinsider.com/stud...nership-2019-7


https://hbr.org/2019/04/student-debt...-entrepreneurs
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Old Yesterday, 08:06 AM
Status: "flights are frequently cancelled" (set 1 day ago)
 
99 posts, read 15,677 times
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I don't know. How much of that cancelled student debt are you willing to pay? How much are the banks going to write off their books?

Maybe we shouldn't be encouraging everyone to go to college and be swallowed by debt. If people are $100 - $200 thousand in debt, maybe we encourage others to do the same.

Why did college costs sky rocket? Generally because students could borrow the money. If student loans were not so easy to obtain, colleges would not have been able to raise their prices so much and so fast.

Students are not making sound economic choices. For people going to college, they should be able to figure this out before they are underwater.
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Old Yesterday, 08:08 AM
 
Location: southern california
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It’s not a debt forgiveness it means I pay for your worthless masters in political science instead of you
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Old Yesterday, 08:10 AM
 
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This presupposes that these students have actual jobs and are not growing the ranks of 'boomerang' kids that move back in to mom & dad's house.

So, no.
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Old Yesterday, 08:22 AM
 
Location: Holly Neighborhood, Austin, Texas
3,757 posts, read 5,565,994 times
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Okay so we have $1.6T in debt that if cancelled would allow 400,000 former students to buy a home. Doing simple division this write off would cost $4M for each of the new homeowners buying homes that average $227k. Of course there are other benefits of doing this debt forgiveness, but that argument doesn't pencil out.

Also this doesn't take into account the ancillary damage done to those without this benefit. That is the ex-students will now be outcompeting for a limited number of homes with those whose financial situation did not change, thus creating more housing inflation.
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Old Yesterday, 08:24 AM
 
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Quote:
Originally Posted by Huckleberry3911948 View Post
It’s not a debt forgiveness it means I pay for your worthless masters in political science instead of you
Exactly. Why would I want to pay for a new grad to buy a new house?

The myth of student loan "forgiveness" refers to grad students since this plan would not apply to private school debt. Most public universities would not saddle you with hundreds of thousands of dollars in debt unless you change majors eight times or go to grad school.
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Old Yesterday, 08:25 AM
Status: "flights are frequently cancelled" (set 1 day ago)
 
99 posts, read 15,677 times
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Young people should explore these areas before they commit to loans and debt. Our country and economy needs these jobs, not another degree in latest trend program.

Building and Construction Trades Apprenticeship Programs
  • Painters and Allied Trades Finishing Trades Institute
  • Ironworkers
  • Heat and Frost Insulators
  • Boilermakers National Joint Apprenticeship Program
  • Electrical Workers/National Electrical Contractors Association National Joint Apprenticeship Council
  • Bricklayers Masonry Institute
  • Elevator Constructors National Elevator Industry Educational Program
  • Plasterers and Cement Masons
  • The Sheet Metal Workers International Training Institute
  • Plumbers and Pipe Fitters
  • United Union of Roofers and Waterproofers
  • Operating Engineers

Manufacturing Training and Apprenticeship Programs
  • Machinists (IAM) Apprenticeship
  • UAW Apprenticeships
  • Ford-UAW Apprenticeship Program
  • UAW-Chrysler Apprentice Program
  • UAW-GM Center for Human Resources
  • UNITE HERE! Local 11 Hospitality Training Academy
  • USW Apprenticeship

https://aflcio.org/about-us/careers-and-apprenticeships
https://nabtu.org/apprenticeship-and-training/
https://apprenticeship.cabuildingtrades.org/

Check out these apprentices on This Old House:
https://www.thisoldhouse.com/2101899...oh-apprentices

It's very unfortunate for our society that people who work with the hands or actually produce a product are generally viewed as not as smart or not as good as people who go to college. We are losing a generation of workers and tradespeople. Who do they think are going to build those houses for college people when $100,000k of student debt is forgiven?
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Old Yesterday, 08:32 AM
 
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Most of those above jobs are rooted in strong unions which you won't find in many areas, especially the South. I agree they are still decent jobs, though (for the young and healthy).
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Old Yesterday, 08:35 AM
 
Location: Swiftwater, PA
16,364 posts, read 13,131,087 times
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Quote:
Originally Posted by Trekker99 View Post
This presupposes that these students have actual jobs and are not growing the ranks of 'boomerang' kids that move back in to mom & dad's house.

So, no.
Isn't that the problem with this proposal? It rules out personal responsibility. We want; but we don't want to pay.

Then there is the other presumption that the forgiven debt would go into buy a house. Many of those that moved back home have no motivation for buying a house; this isn't our generation. They are happy to lay on the sofa and play video games and let M&D pay the bills - why would they want home owner bills? Even if they did buy a house, since they would then be used to being bailed out, why would they pay their mortgage off on time?
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Old Yesterday, 08:42 AM
 
1,956 posts, read 1,067,938 times
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Quote:
Originally Posted by fisheye View Post
Isn't that the problem with this proposal? It rules out personal responsibility. We want; but we don't want to pay.

Then there is the other presumption that the forgiven debt would go into buy a house. Many of those that moved back home have no motivation for buying a house; this isn't our generation. They are happy to lay on the sofa and play video games and let M&D pay the bills - why would they want home owner bills? Even if they did buy a house, since they would then be used to being bailed out, why would they pay their mortgage off on time?
These are all great points. I think the bottom line, though, is taxpayers don't want to pay for grads to buy new houses. Many taxpayers can't even buy homes. It seems a "luxury", unlike food and healthcare which are needed to survive.

Remember, you are talking about GRAD students, who generally have fairly high income earning potential. It would be kind of hard for an undergrad to rack up that much debt at a public university.
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