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Capitalism, The Fed and Economic Policy

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    mrussel1mrussel1 Posts: 28,709
    mickeyrat said:
    struck me as something to note and watch....


     
    Retailers, beware: Resumption of student loan payments could lead some buyers to pull back
    By Paul Wiseman
    Yesterday

    WASHINGTON (AP) — The reprieve is over. Just as the American economy is struggling with high inflation and interest rates, the coming resumption of student loan payments poses yet another potential challenge.

    The suspension of federal student loan payments, which took effect at the height of the pandemic in 2020, expires late this summer. Interest will start accruing again in September. Payments will resume in October.

    Though many hoped their loans might at least be lightened, the Supreme Court last week struck down a Biden administration plan that would have given millions of people some relief from the return of the loan payments. The Biden plan would have canceled up to $20,000 in federal student loans for 43 million borrowers; 20 million would have had their loans erased entirely. The court ruled that the plan exceeded the government’s authority.

    The restart of those payments will force many people to start paying hundreds of dollars in loans each month — money they had been spending elsewhere for the past three years. Their pullback in spending on goods and services won't likely make a serious dent in the $26 trillion U.S. economy, the world's largest. Any pain instead will likely be concentrated in a few industries, notably e-commerce companies, bars and restaurants and some major retailers.

    Even if all that won't be enough to weaken overall economic growth, the shift in spending by many young adults could inject further uncertainty into an economy already beset by uncertainties, from whether the Fed will manage to tame inflation and halt its interest rate hikes to whether a recession is destined to strike by next year, as many economists still fear.

    Josh Bivens, chief economist at the Economic Policy Institute think tank, suggested that the likely hit to the economy might amount to perhaps one-third of a percentage point of gross domestic product — the nation's total output of goods and services — or about $85 billion or $90 billion a year.

    It's “not trivial, but it’s not huge,’’ Bivens said. “At the macro level, my guess is that it won’t be a game-changer.’’

    The continued willingness of consumers to spend has kept the economy humming despite more than a year of dramatically rising interest rates. Consumers have had the financial wherewithal to load up Amazon shopping carts, go out for dinner and buy everything from lawn furniture to new refrigerators, in part because the government spent around $5 trillion since 2020 to cushion the economic damage from COVID-19.

    But those pandemic relief programs, including the student loan moratorium, are ending and adding to the obstacles the economy is facing.

    The suspension of loan payments “had given people a bit more money in the pocket, and they’ve gone out and they’ve spent that money,’’ said Neil Saunders, managing director of the GlobalData Retail consultancy.

    Deutsche Bank analysts who follow the retail industry estimate that the resumption of the loan payments could shrink consumer spending by $14 billion a month, or an average of $305 per borrower. The biggest blow, they say, will likely be absorbed by online commerce and mail-order companies and by restaurants and bars.

    Among the individual companies that could be hurt, according to the Deutsche Bank analysis, are Macy’s, Target and Kohl’s. The largest retailer, Walmart, is thought to be insulated from major damage because of its grocery business. (Walmart is also the nation's largest grocer.)

    Dollar stores and other discounters might even benefit if more financially squeezed consumers turn to bargain-hunting.

    Jan Hatzius, chief economist at Goldman Sachs, and his colleagues say they expect the end of the student loan moratorium to impose a “modest drag’’ on the economy, shaving 0.2% off growth in consumer spending this year. The dent to spending would have been half as much, they say, if the Supreme Court had allowed the Biden debt forgiveness program to proceed.

    The economy has endured a wild ride since COVID-19 hit in early 2020. A deep recession engulfed the economy in March and April that year. Massive government aid fueled a rebound of surprising speed, strength and resilience.

    But it came at a price: Surging demand from consumers overwhelmed the world’s factories, ports and freight yards, resulting in delays, shortages — and much higher prices. Inflation surged last year to heights not seen since the early 1980s.

    In response, the Fed began jacking up its benchmark short-term rate in March 2022. Since then, it’s raised its key rate 10 times. Higher borrowing costs have had the intended effect of slowing the economy and price acceleration. From a year-over-year peak of 9.1% in June 2022, consumer price inflation fell to 4% in May. Yet that’s still twice the Fed’s 2% target. So the central bank has signaled that more rate hike are likely this year.

    At the same time, the government has been phasing out pandemic relief. Extended unemployment aid ended in September 2021. An expansion of the food stamps program ended this year.

    The savings that Americans had socked away beginning at the peak of the pandemic — when they were receiving government relief checks and saving money while hunkered down at home — are evaporating. Fed researchers have reported that any “excess’’ pandemic savings probably dried up in the first three months of 2023.

    Despite everything, the economy has proved surprisingly durable. The government last week sharply upgraded its estimate of January-through-March economic growth to a 2% annual rate and said consumers were spending at their fastest pace in nearly two years. Factor in a still-robust job market — employers keep hiring briskly, and unemployment, at 3.7%, is barely above a half-century low — and the economy has repeatedly outrun predictions, first sounded more than a year ago, that a recession was inevitable.

    “The economy has really powered through it,’’ Bivens said. “So what is the straw that breaks the camel’s back? My guess is it’s not this. I don’t think it’s a big-enough thing.’’

    Still, Bivens said, he worries about the Fed rate hikes and federal cutbacks, including the end of the student loan payment moratorium, “throwing more contractionary shocks’’ at an American economy that has defied the doubters — at least for now.

    ___

    AP Retail Writer Anne D'Innocenzio contributed to this report from New York.


    THE STUDENT LOAN RELIEF ONE GETS ME.  So… We bail out the billionaires but continue to handcuff the every day worker and not bail them out…
    I’d argue that people with college and graduate degrees aren’t the everyday workers.  If I’m not mistaken, half of the student load debt was for grad school.  
  • Options
    tempo_n_groovetempo_n_groove Posts: 39,124
    mrussel1 said:
    mickeyrat said:
    struck me as something to note and watch....


     
    Retailers, beware: Resumption of student loan payments could lead some buyers to pull back
    By Paul Wiseman
    Yesterday

    WASHINGTON (AP) — The reprieve is over. Just as the American economy is struggling with high inflation and interest rates, the coming resumption of student loan payments poses yet another potential challenge.

    The suspension of federal student loan payments, which took effect at the height of the pandemic in 2020, expires late this summer. Interest will start accruing again in September. Payments will resume in October.

    Though many hoped their loans might at least be lightened, the Supreme Court last week struck down a Biden administration plan that would have given millions of people some relief from the return of the loan payments. The Biden plan would have canceled up to $20,000 in federal student loans for 43 million borrowers; 20 million would have had their loans erased entirely. The court ruled that the plan exceeded the government’s authority.

    The restart of those payments will force many people to start paying hundreds of dollars in loans each month — money they had been spending elsewhere for the past three years. Their pullback in spending on goods and services won't likely make a serious dent in the $26 trillion U.S. economy, the world's largest. Any pain instead will likely be concentrated in a few industries, notably e-commerce companies, bars and restaurants and some major retailers.

    Even if all that won't be enough to weaken overall economic growth, the shift in spending by many young adults could inject further uncertainty into an economy already beset by uncertainties, from whether the Fed will manage to tame inflation and halt its interest rate hikes to whether a recession is destined to strike by next year, as many economists still fear.

    Josh Bivens, chief economist at the Economic Policy Institute think tank, suggested that the likely hit to the economy might amount to perhaps one-third of a percentage point of gross domestic product — the nation's total output of goods and services — or about $85 billion or $90 billion a year.

    It's “not trivial, but it’s not huge,’’ Bivens said. “At the macro level, my guess is that it won’t be a game-changer.’’

    The continued willingness of consumers to spend has kept the economy humming despite more than a year of dramatically rising interest rates. Consumers have had the financial wherewithal to load up Amazon shopping carts, go out for dinner and buy everything from lawn furniture to new refrigerators, in part because the government spent around $5 trillion since 2020 to cushion the economic damage from COVID-19.

    But those pandemic relief programs, including the student loan moratorium, are ending and adding to the obstacles the economy is facing.

    The suspension of loan payments “had given people a bit more money in the pocket, and they’ve gone out and they’ve spent that money,’’ said Neil Saunders, managing director of the GlobalData Retail consultancy.

    Deutsche Bank analysts who follow the retail industry estimate that the resumption of the loan payments could shrink consumer spending by $14 billion a month, or an average of $305 per borrower. The biggest blow, they say, will likely be absorbed by online commerce and mail-order companies and by restaurants and bars.

    Among the individual companies that could be hurt, according to the Deutsche Bank analysis, are Macy’s, Target and Kohl’s. The largest retailer, Walmart, is thought to be insulated from major damage because of its grocery business. (Walmart is also the nation's largest grocer.)

    Dollar stores and other discounters might even benefit if more financially squeezed consumers turn to bargain-hunting.

    Jan Hatzius, chief economist at Goldman Sachs, and his colleagues say they expect the end of the student loan moratorium to impose a “modest drag’’ on the economy, shaving 0.2% off growth in consumer spending this year. The dent to spending would have been half as much, they say, if the Supreme Court had allowed the Biden debt forgiveness program to proceed.

    The economy has endured a wild ride since COVID-19 hit in early 2020. A deep recession engulfed the economy in March and April that year. Massive government aid fueled a rebound of surprising speed, strength and resilience.

    But it came at a price: Surging demand from consumers overwhelmed the world’s factories, ports and freight yards, resulting in delays, shortages — and much higher prices. Inflation surged last year to heights not seen since the early 1980s.

    In response, the Fed began jacking up its benchmark short-term rate in March 2022. Since then, it’s raised its key rate 10 times. Higher borrowing costs have had the intended effect of slowing the economy and price acceleration. From a year-over-year peak of 9.1% in June 2022, consumer price inflation fell to 4% in May. Yet that’s still twice the Fed’s 2% target. So the central bank has signaled that more rate hike are likely this year.

    At the same time, the government has been phasing out pandemic relief. Extended unemployment aid ended in September 2021. An expansion of the food stamps program ended this year.

    The savings that Americans had socked away beginning at the peak of the pandemic — when they were receiving government relief checks and saving money while hunkered down at home — are evaporating. Fed researchers have reported that any “excess’’ pandemic savings probably dried up in the first three months of 2023.

    Despite everything, the economy has proved surprisingly durable. The government last week sharply upgraded its estimate of January-through-March economic growth to a 2% annual rate and said consumers were spending at their fastest pace in nearly two years. Factor in a still-robust job market — employers keep hiring briskly, and unemployment, at 3.7%, is barely above a half-century low — and the economy has repeatedly outrun predictions, first sounded more than a year ago, that a recession was inevitable.

    “The economy has really powered through it,’’ Bivens said. “So what is the straw that breaks the camel’s back? My guess is it’s not this. I don’t think it’s a big-enough thing.’’

    Still, Bivens said, he worries about the Fed rate hikes and federal cutbacks, including the end of the student loan payment moratorium, “throwing more contractionary shocks’’ at an American economy that has defied the doubters — at least for now.

    ___

    AP Retail Writer Anne D'Innocenzio contributed to this report from New York.


    THE STUDENT LOAN RELIEF ONE GETS ME.  So… We bail out the billionaires but continue to handcuff the every day worker and not bail them out…
    I’d argue that people with college and graduate degrees aren’t the everyday workers.  If I’m not mistaken, half of the student load debt was for grad school.  
    If you still or have a student loan that is haunting you then you are an everyday worker.
  • Options
    The JugglerThe Juggler Behind that bush over there. Posts: 47,359
    Purely anecdotal but I talk to regular people every day who have tens of thousands of student loan debt that they either have yet start paying on or have not made payments on in years. Most of these people are already struggling to pay their other bills. 
    chinese-happy.jpg
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    static111static111 Posts: 4,889
    Purely anecdotal but I talk to regular people every day who have tens of thousands of student loan debt that they either have yet start paying on or have not made payments on in years. Most of these people are already struggling to pay their other bills. 
    I'm paying mine regularly.  It never goes away and I only borrowed 15k for trade school.  paid about 18k at this point with 10k still to go thanks to the interest freeze.  I expect it to balloon back up once interest starts accruing again.  These are federal loans not private. 6.5% interest. I'd hate to get some relief from that if it meant a slap in the face to people that went to school before costs went sideways and student loans became a money making enterprise. 
    Scio me nihil scire

    There are no kings inside the gates of eden
  • Options
    mrussel1mrussel1 Posts: 28,709
    mrussel1 said:
    mickeyrat said:
    struck me as something to note and watch....


     
    Retailers, beware: Resumption of student loan payments could lead some buyers to pull back
    By Paul Wiseman
    Yesterday

    WASHINGTON (AP) — The reprieve is over. Just as the American economy is struggling with high inflation and interest rates, the coming resumption of student loan payments poses yet another potential challenge.

    The suspension of federal student loan payments, which took effect at the height of the pandemic in 2020, expires late this summer. Interest will start accruing again in September. Payments will resume in October.

    Though many hoped their loans might at least be lightened, the Supreme Court last week struck down a Biden administration plan that would have given millions of people some relief from the return of the loan payments. The Biden plan would have canceled up to $20,000 in federal student loans for 43 million borrowers; 20 million would have had their loans erased entirely. The court ruled that the plan exceeded the government’s authority.

    The restart of those payments will force many people to start paying hundreds of dollars in loans each month — money they had been spending elsewhere for the past three years. Their pullback in spending on goods and services won't likely make a serious dent in the $26 trillion U.S. economy, the world's largest. Any pain instead will likely be concentrated in a few industries, notably e-commerce companies, bars and restaurants and some major retailers.

    Even if all that won't be enough to weaken overall economic growth, the shift in spending by many young adults could inject further uncertainty into an economy already beset by uncertainties, from whether the Fed will manage to tame inflation and halt its interest rate hikes to whether a recession is destined to strike by next year, as many economists still fear.

    Josh Bivens, chief economist at the Economic Policy Institute think tank, suggested that the likely hit to the economy might amount to perhaps one-third of a percentage point of gross domestic product — the nation's total output of goods and services — or about $85 billion or $90 billion a year.

    It's “not trivial, but it’s not huge,’’ Bivens said. “At the macro level, my guess is that it won’t be a game-changer.’’

    The continued willingness of consumers to spend has kept the economy humming despite more than a year of dramatically rising interest rates. Consumers have had the financial wherewithal to load up Amazon shopping carts, go out for dinner and buy everything from lawn furniture to new refrigerators, in part because the government spent around $5 trillion since 2020 to cushion the economic damage from COVID-19.

    But those pandemic relief programs, including the student loan moratorium, are ending and adding to the obstacles the economy is facing.

    The suspension of loan payments “had given people a bit more money in the pocket, and they’ve gone out and they’ve spent that money,’’ said Neil Saunders, managing director of the GlobalData Retail consultancy.

    Deutsche Bank analysts who follow the retail industry estimate that the resumption of the loan payments could shrink consumer spending by $14 billion a month, or an average of $305 per borrower. The biggest blow, they say, will likely be absorbed by online commerce and mail-order companies and by restaurants and bars.

    Among the individual companies that could be hurt, according to the Deutsche Bank analysis, are Macy’s, Target and Kohl’s. The largest retailer, Walmart, is thought to be insulated from major damage because of its grocery business. (Walmart is also the nation's largest grocer.)

    Dollar stores and other discounters might even benefit if more financially squeezed consumers turn to bargain-hunting.

    Jan Hatzius, chief economist at Goldman Sachs, and his colleagues say they expect the end of the student loan moratorium to impose a “modest drag’’ on the economy, shaving 0.2% off growth in consumer spending this year. The dent to spending would have been half as much, they say, if the Supreme Court had allowed the Biden debt forgiveness program to proceed.

    The economy has endured a wild ride since COVID-19 hit in early 2020. A deep recession engulfed the economy in March and April that year. Massive government aid fueled a rebound of surprising speed, strength and resilience.

    But it came at a price: Surging demand from consumers overwhelmed the world’s factories, ports and freight yards, resulting in delays, shortages — and much higher prices. Inflation surged last year to heights not seen since the early 1980s.

    In response, the Fed began jacking up its benchmark short-term rate in March 2022. Since then, it’s raised its key rate 10 times. Higher borrowing costs have had the intended effect of slowing the economy and price acceleration. From a year-over-year peak of 9.1% in June 2022, consumer price inflation fell to 4% in May. Yet that’s still twice the Fed’s 2% target. So the central bank has signaled that more rate hike are likely this year.

    At the same time, the government has been phasing out pandemic relief. Extended unemployment aid ended in September 2021. An expansion of the food stamps program ended this year.

    The savings that Americans had socked away beginning at the peak of the pandemic — when they were receiving government relief checks and saving money while hunkered down at home — are evaporating. Fed researchers have reported that any “excess’’ pandemic savings probably dried up in the first three months of 2023.

    Despite everything, the economy has proved surprisingly durable. The government last week sharply upgraded its estimate of January-through-March economic growth to a 2% annual rate and said consumers were spending at their fastest pace in nearly two years. Factor in a still-robust job market — employers keep hiring briskly, and unemployment, at 3.7%, is barely above a half-century low — and the economy has repeatedly outrun predictions, first sounded more than a year ago, that a recession was inevitable.

    “The economy has really powered through it,’’ Bivens said. “So what is the straw that breaks the camel’s back? My guess is it’s not this. I don’t think it’s a big-enough thing.’’

    Still, Bivens said, he worries about the Fed rate hikes and federal cutbacks, including the end of the student loan payment moratorium, “throwing more contractionary shocks’’ at an American economy that has defied the doubters — at least for now.

    ___

    AP Retail Writer Anne D'Innocenzio contributed to this report from New York.


    THE STUDENT LOAN RELIEF ONE GETS ME.  So… We bail out the billionaires but continue to handcuff the every day worker and not bail them out…
    I’d argue that people with college and graduate degrees aren’t the everyday workers.  If I’m not mistaken, half of the student load debt was for grad school.  
    If you still or have a student loan that is haunting you then you are an everyday worker.
    I don't know what "haunting" means.  If you're making 200k a year but you still have 60k in student loan debt, are you really worse off than the person making $20 per hour?  I don't think so.  Remember that 46% of debt is held by graduate students, not undergrad.  

    I think you could do things like freeze interest or tie it to the discount rate and that would be very helpful.  But waiving student loan debt is a benefit to the class of Americans most likely to have high incomes.  It's regressive in nature, in my opinion, not progressive. 
  • Options
    mickeyratmickeyrat up my ass, like Chadwick was up his Posts: 35,999
    _____________________________________SIGNATURE________________________________________________

    Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
    you're finally here and I'm a mess................................................... nationwide arena columbus '10
    memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
    another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
  • Options
    The JugglerThe Juggler Behind that bush over there. Posts: 47,359
    mrussel1 said:
    mrussel1 said:
    mickeyrat said:
    struck me as something to note and watch....


     
    Retailers, beware: Resumption of student loan payments could lead some buyers to pull back
    By Paul Wiseman
    Yesterday

    WASHINGTON (AP) — The reprieve is over. Just as the American economy is struggling with high inflation and interest rates, the coming resumption of student loan payments poses yet another potential challenge.

    The suspension of federal student loan payments, which took effect at the height of the pandemic in 2020, expires late this summer. Interest will start accruing again in September. Payments will resume in October.

    Though many hoped their loans might at least be lightened, the Supreme Court last week struck down a Biden administration plan that would have given millions of people some relief from the return of the loan payments. The Biden plan would have canceled up to $20,000 in federal student loans for 43 million borrowers; 20 million would have had their loans erased entirely. The court ruled that the plan exceeded the government’s authority.

    The restart of those payments will force many people to start paying hundreds of dollars in loans each month — money they had been spending elsewhere for the past three years. Their pullback in spending on goods and services won't likely make a serious dent in the $26 trillion U.S. economy, the world's largest. Any pain instead will likely be concentrated in a few industries, notably e-commerce companies, bars and restaurants and some major retailers.

    Even if all that won't be enough to weaken overall economic growth, the shift in spending by many young adults could inject further uncertainty into an economy already beset by uncertainties, from whether the Fed will manage to tame inflation and halt its interest rate hikes to whether a recession is destined to strike by next year, as many economists still fear.

    Josh Bivens, chief economist at the Economic Policy Institute think tank, suggested that the likely hit to the economy might amount to perhaps one-third of a percentage point of gross domestic product — the nation's total output of goods and services — or about $85 billion or $90 billion a year.

    It's “not trivial, but it’s not huge,’’ Bivens said. “At the macro level, my guess is that it won’t be a game-changer.’’

    The continued willingness of consumers to spend has kept the economy humming despite more than a year of dramatically rising interest rates. Consumers have had the financial wherewithal to load up Amazon shopping carts, go out for dinner and buy everything from lawn furniture to new refrigerators, in part because the government spent around $5 trillion since 2020 to cushion the economic damage from COVID-19.

    But those pandemic relief programs, including the student loan moratorium, are ending and adding to the obstacles the economy is facing.

    The suspension of loan payments “had given people a bit more money in the pocket, and they’ve gone out and they’ve spent that money,’’ said Neil Saunders, managing director of the GlobalData Retail consultancy.

    Deutsche Bank analysts who follow the retail industry estimate that the resumption of the loan payments could shrink consumer spending by $14 billion a month, or an average of $305 per borrower. The biggest blow, they say, will likely be absorbed by online commerce and mail-order companies and by restaurants and bars.

    Among the individual companies that could be hurt, according to the Deutsche Bank analysis, are Macy’s, Target and Kohl’s. The largest retailer, Walmart, is thought to be insulated from major damage because of its grocery business. (Walmart is also the nation's largest grocer.)

    Dollar stores and other discounters might even benefit if more financially squeezed consumers turn to bargain-hunting.

    Jan Hatzius, chief economist at Goldman Sachs, and his colleagues say they expect the end of the student loan moratorium to impose a “modest drag’’ on the economy, shaving 0.2% off growth in consumer spending this year. The dent to spending would have been half as much, they say, if the Supreme Court had allowed the Biden debt forgiveness program to proceed.

    The economy has endured a wild ride since COVID-19 hit in early 2020. A deep recession engulfed the economy in March and April that year. Massive government aid fueled a rebound of surprising speed, strength and resilience.

    But it came at a price: Surging demand from consumers overwhelmed the world’s factories, ports and freight yards, resulting in delays, shortages — and much higher prices. Inflation surged last year to heights not seen since the early 1980s.

    In response, the Fed began jacking up its benchmark short-term rate in March 2022. Since then, it’s raised its key rate 10 times. Higher borrowing costs have had the intended effect of slowing the economy and price acceleration. From a year-over-year peak of 9.1% in June 2022, consumer price inflation fell to 4% in May. Yet that’s still twice the Fed’s 2% target. So the central bank has signaled that more rate hike are likely this year.

    At the same time, the government has been phasing out pandemic relief. Extended unemployment aid ended in September 2021. An expansion of the food stamps program ended this year.

    The savings that Americans had socked away beginning at the peak of the pandemic — when they were receiving government relief checks and saving money while hunkered down at home — are evaporating. Fed researchers have reported that any “excess’’ pandemic savings probably dried up in the first three months of 2023.

    Despite everything, the economy has proved surprisingly durable. The government last week sharply upgraded its estimate of January-through-March economic growth to a 2% annual rate and said consumers were spending at their fastest pace in nearly two years. Factor in a still-robust job market — employers keep hiring briskly, and unemployment, at 3.7%, is barely above a half-century low — and the economy has repeatedly outrun predictions, first sounded more than a year ago, that a recession was inevitable.

    “The economy has really powered through it,’’ Bivens said. “So what is the straw that breaks the camel’s back? My guess is it’s not this. I don’t think it’s a big-enough thing.’’

    Still, Bivens said, he worries about the Fed rate hikes and federal cutbacks, including the end of the student loan payment moratorium, “throwing more contractionary shocks’’ at an American economy that has defied the doubters — at least for now.

    ___

    AP Retail Writer Anne D'Innocenzio contributed to this report from New York.


    THE STUDENT LOAN RELIEF ONE GETS ME.  So… We bail out the billionaires but continue to handcuff the every day worker and not bail them out…
    I’d argue that people with college and graduate degrees aren’t the everyday workers.  If I’m not mistaken, half of the student load debt was for grad school.  
    If you still or have a student loan that is haunting you then you are an everyday worker.
    I don't know what "haunting" means.  If you're making 200k a year but you still have 60k in student loan debt, are you really worse off than the person making $20 per hour?  I don't think so.  Remember that 46% of debt is held by graduate students, not undergrad.  

    I think you could do things like freeze interest or tie it to the discount rate and that would be very helpful.  But waiving student loan debt is a benefit to the class of Americans most likely to have high incomes.  It's regressive in nature, in my opinion, not progressive. 
    So that means 54% of people are not grad students. I talk to people making less than 100k who have roughly that same amount of student loan debt you mention all the time.  
    chinese-happy.jpg
  • Options
    The JugglerThe Juggler Behind that bush over there. Posts: 47,359
    mickeyrat said:
    Yeah this is insane
    https://www.cnbc.com/2023/07/06/adp-jobs-report-private-sector-added-497000-workers-in-june.html

    Really interested to see what the gov's number looks like tomorrow. Interest rates are shooting up again....
    chinese-happy.jpg
  • Options
    mrussel1mrussel1 Posts: 28,709
    mrussel1 said:
    mrussel1 said:
    mickeyrat said:
    struck me as something to note and watch....


     
    Retailers, beware: Resumption of student loan payments could lead some buyers to pull back
    By Paul Wiseman
    Yesterday

    WASHINGTON (AP) — The reprieve is over. Just as the American economy is struggling with high inflation and interest rates, the coming resumption of student loan payments poses yet another potential challenge.

    The suspension of federal student loan payments, which took effect at the height of the pandemic in 2020, expires late this summer. Interest will start accruing again in September. Payments will resume in October.

    Though many hoped their loans might at least be lightened, the Supreme Court last week struck down a Biden administration plan that would have given millions of people some relief from the return of the loan payments. The Biden plan would have canceled up to $20,000 in federal student loans for 43 million borrowers; 20 million would have had their loans erased entirely. The court ruled that the plan exceeded the government’s authority.

    The restart of those payments will force many people to start paying hundreds of dollars in loans each month — money they had been spending elsewhere for the past three years. Their pullback in spending on goods and services won't likely make a serious dent in the $26 trillion U.S. economy, the world's largest. Any pain instead will likely be concentrated in a few industries, notably e-commerce companies, bars and restaurants and some major retailers.

    Even if all that won't be enough to weaken overall economic growth, the shift in spending by many young adults could inject further uncertainty into an economy already beset by uncertainties, from whether the Fed will manage to tame inflation and halt its interest rate hikes to whether a recession is destined to strike by next year, as many economists still fear.

    Josh Bivens, chief economist at the Economic Policy Institute think tank, suggested that the likely hit to the economy might amount to perhaps one-third of a percentage point of gross domestic product — the nation's total output of goods and services — or about $85 billion or $90 billion a year.

    It's “not trivial, but it’s not huge,’’ Bivens said. “At the macro level, my guess is that it won’t be a game-changer.’’

    The continued willingness of consumers to spend has kept the economy humming despite more than a year of dramatically rising interest rates. Consumers have had the financial wherewithal to load up Amazon shopping carts, go out for dinner and buy everything from lawn furniture to new refrigerators, in part because the government spent around $5 trillion since 2020 to cushion the economic damage from COVID-19.

    But those pandemic relief programs, including the student loan moratorium, are ending and adding to the obstacles the economy is facing.

    The suspension of loan payments “had given people a bit more money in the pocket, and they’ve gone out and they’ve spent that money,’’ said Neil Saunders, managing director of the GlobalData Retail consultancy.

    Deutsche Bank analysts who follow the retail industry estimate that the resumption of the loan payments could shrink consumer spending by $14 billion a month, or an average of $305 per borrower. The biggest blow, they say, will likely be absorbed by online commerce and mail-order companies and by restaurants and bars.

    Among the individual companies that could be hurt, according to the Deutsche Bank analysis, are Macy’s, Target and Kohl’s. The largest retailer, Walmart, is thought to be insulated from major damage because of its grocery business. (Walmart is also the nation's largest grocer.)

    Dollar stores and other discounters might even benefit if more financially squeezed consumers turn to bargain-hunting.

    Jan Hatzius, chief economist at Goldman Sachs, and his colleagues say they expect the end of the student loan moratorium to impose a “modest drag’’ on the economy, shaving 0.2% off growth in consumer spending this year. The dent to spending would have been half as much, they say, if the Supreme Court had allowed the Biden debt forgiveness program to proceed.

    The economy has endured a wild ride since COVID-19 hit in early 2020. A deep recession engulfed the economy in March and April that year. Massive government aid fueled a rebound of surprising speed, strength and resilience.

    But it came at a price: Surging demand from consumers overwhelmed the world’s factories, ports and freight yards, resulting in delays, shortages — and much higher prices. Inflation surged last year to heights not seen since the early 1980s.

    In response, the Fed began jacking up its benchmark short-term rate in March 2022. Since then, it’s raised its key rate 10 times. Higher borrowing costs have had the intended effect of slowing the economy and price acceleration. From a year-over-year peak of 9.1% in June 2022, consumer price inflation fell to 4% in May. Yet that’s still twice the Fed’s 2% target. So the central bank has signaled that more rate hike are likely this year.

    At the same time, the government has been phasing out pandemic relief. Extended unemployment aid ended in September 2021. An expansion of the food stamps program ended this year.

    The savings that Americans had socked away beginning at the peak of the pandemic — when they were receiving government relief checks and saving money while hunkered down at home — are evaporating. Fed researchers have reported that any “excess’’ pandemic savings probably dried up in the first three months of 2023.

    Despite everything, the economy has proved surprisingly durable. The government last week sharply upgraded its estimate of January-through-March economic growth to a 2% annual rate and said consumers were spending at their fastest pace in nearly two years. Factor in a still-robust job market — employers keep hiring briskly, and unemployment, at 3.7%, is barely above a half-century low — and the economy has repeatedly outrun predictions, first sounded more than a year ago, that a recession was inevitable.

    “The economy has really powered through it,’’ Bivens said. “So what is the straw that breaks the camel’s back? My guess is it’s not this. I don’t think it’s a big-enough thing.’’

    Still, Bivens said, he worries about the Fed rate hikes and federal cutbacks, including the end of the student loan payment moratorium, “throwing more contractionary shocks’’ at an American economy that has defied the doubters — at least for now.

    ___

    AP Retail Writer Anne D'Innocenzio contributed to this report from New York.


    THE STUDENT LOAN RELIEF ONE GETS ME.  So… We bail out the billionaires but continue to handcuff the every day worker and not bail them out…
    I’d argue that people with college and graduate degrees aren’t the everyday workers.  If I’m not mistaken, half of the student load debt was for grad school.  
    If you still or have a student loan that is haunting you then you are an everyday worker.
    I don't know what "haunting" means.  If you're making 200k a year but you still have 60k in student loan debt, are you really worse off than the person making $20 per hour?  I don't think so.  Remember that 46% of debt is held by graduate students, not undergrad.  

    I think you could do things like freeze interest or tie it to the discount rate and that would be very helpful.  But waiving student loan debt is a benefit to the class of Americans most likely to have high incomes.  It's regressive in nature, in my opinion, not progressive. 
    So that means 54% of people are not grad students. I talk to people making less than 100k who have roughly that same amount of student loan debt you mention all the time.  
    Well what it means to me is that a solid minority of students are holding half the debt.  But it also means to me that if your angle is right, that graduates making less than 100k are holding a 100k+ in debt, that just screams of bad choices in my opinion.  Now the gov't rewards bad decisions all the time, and I get that.  But if you believe that we do actually have to pay our federal debt one day, then there isn't a good reason to provide such a significant financial benefit to the class of people who are most likely to be top earners.  
  • Options
    Gern BlanstenGern Blansten Your Mom's Posts: 18,007
    I remember a roommate of my daughter who couldn't even pay her rent until her student loan came through. Kids were borrowing $20K/year to cover tuition, room and board. 

    I can't imagine telling my kids to get a degree knowing that they will have at least $80K in debt when they graduate (assuming they graduate in four years.)

    It may have seemed like a good idea to keep student loan debt from being dischargeable in bankruptcy to encourage lenders to make funds available...but it wasn't. Fucking horrible idea.

    When the parents are ignorant enough to encourage that shit how do we blame the student? 

    That girl should have gone to college closer to home and skipped the room and board costs at a minimum.
    Remember the Thomas Nine !! (10/02/2018)

    1998: Noblesville; 2003: Noblesville; 2009: EV Nashville, Chicago, Chicago
    2010: St Louis, Columbus, Noblesville; 2011: EV Chicago, East Troy, East Troy
    2013: London ON, Chicago; 2014: Cincy, St Louis, Moline (NO CODE)
    2016: Lexington, Wrigley #1; 2018: Wrigley, Wrigley, Boston, Boston
    2020: Oakland, Oakland:  2021: EV Ohana, Ohana, Ohana, Ohana
    2022: Oakland, Oakland, Nashville, Louisville; 2023: Chicago, Chicago, Noblesville
    2024: Noblesville, Wrigley, Wrigley, Ohana, Ohana
  • Options
    The JugglerThe Juggler Behind that bush over there. Posts: 47,359
    edited July 2023
    Not saying they made correct choices. I am just saying there are likely millions of regular people (not just mostly grad students making 200k plus) drowning in debt while their student loans have been in deferment. Toss in an extra few hundred dollars a month for those loan payments and they're going to be in even worse shape. 
    Post edited by The Juggler on
    chinese-happy.jpg
  • Options
    mrussel1mrussel1 Posts: 28,709
    Not saying they made correct choices. I am just saying there are likely millions of regular people (not just mostly grad students making 200k plus) drowning in debt while their student loans have been in deferment. Toss in an extra few hundred dollars a month for those loan payments and they're going to be in even worse shape. 
    But are these people poor, or are they just not advancing at the rate they expected, economically?  In other words, is the problem that they can't buy a house, have kids?  Or are they literally moving into section 8 housing like the real poor people in this country?  My guess is the latter.  But their perspective is different.  Because they were educated enough to know to go to college and take loans (and needed full tuition, not reduced like a real disadvantaged person would receive), I'm guessing most came from middle to upper middle class families.  So what they expect out of life is very different than what someone growing up in East Baltimore or Camden expects.  I don't have data to back up these statements, but I do know that colleges have funds for the truly disadvantaged and are generous with them. 
  • Options
    mrussel1mrussel1 Posts: 28,709
    One other thing that I think really negatively affects these people in their 20's and early 30's that would benefit from the waiver, is the reduced marriage rate.  Marriage has many problems, particularly divorce of course.  But marriage, where finances become intertwined, is how you achieve scale and are able to buy homes.  I bought my first house at 27 right after marrying.  For the same home, I would have had to work almost another decade to be able to do that by myself.  It would have been untenable.  And cohabitating is not the same unless you mix finances.  Otherwise you won't make that type of joint purchase.  But look at the tanking marriage rates in this country, from 10.x to 6.x from our generation to today.  It's hard to get ahead on one income.  


  • Options
    The JugglerThe Juggler Behind that bush over there. Posts: 47,359
    mrussel1 said:
    Not saying they made correct choices. I am just saying there are likely millions of regular people (not just mostly grad students making 200k plus) drowning in debt while their student loans have been in deferment. Toss in an extra few hundred dollars a month for those loan payments and they're going to be in even worse shape. 
    But are these people poor, or are they just not advancing at the rate they expected, economically?  In other words, is the problem that they can't buy a house, have kids?  Or are they literally moving into section 8 housing like the real poor people in this country?  My guess is the latter.  But their perspective is different.  Because they were educated enough to know to go to college and take loans (and needed full tuition, not reduced like a real disadvantaged person would receive), I'm guessing most came from middle to upper middle class families.  So what they expect out of life is very different than what someone growing up in East Baltimore or Camden expects.  I don't have data to back up these statements, but I do know that colleges have funds for the truly disadvantaged and are generous with them. 
    I don't know man. I just disagreed with your original point that they're not "everyday workers." Everyone of them I talk to owns a house and most are drowning in debt and do not make over 200k/year. I suspect I will be starting to include their student loans in their cashout refi applications in the near future when they have to start paying them back again. 
    chinese-happy.jpg
  • Options
    tempo_n_groovetempo_n_groove Posts: 39,124
    mrussel1 said:
    mrussel1 said:
    mickeyrat said:
    struck me as something to note and watch....


     
    Retailers, beware: Resumption of student loan payments could lead some buyers to pull back
    By Paul Wiseman
    Yesterday

    WASHINGTON (AP) — The reprieve is over. Just as the American economy is struggling with high inflation and interest rates, the coming resumption of student loan payments poses yet another potential challenge.

    The suspension of federal student loan payments, which took effect at the height of the pandemic in 2020, expires late this summer. Interest will start accruing again in September. Payments will resume in October.

    Though many hoped their loans might at least be lightened, the Supreme Court last week struck down a Biden administration plan that would have given millions of people some relief from the return of the loan payments. The Biden plan would have canceled up to $20,000 in federal student loans for 43 million borrowers; 20 million would have had their loans erased entirely. The court ruled that the plan exceeded the government’s authority.

    The restart of those payments will force many people to start paying hundreds of dollars in loans each month — money they had been spending elsewhere for the past three years. Their pullback in spending on goods and services won't likely make a serious dent in the $26 trillion U.S. economy, the world's largest. Any pain instead will likely be concentrated in a few industries, notably e-commerce companies, bars and restaurants and some major retailers.

    Even if all that won't be enough to weaken overall economic growth, the shift in spending by many young adults could inject further uncertainty into an economy already beset by uncertainties, from whether the Fed will manage to tame inflation and halt its interest rate hikes to whether a recession is destined to strike by next year, as many economists still fear.

    Josh Bivens, chief economist at the Economic Policy Institute think tank, suggested that the likely hit to the economy might amount to perhaps one-third of a percentage point of gross domestic product — the nation's total output of goods and services — or about $85 billion or $90 billion a year.

    It's “not trivial, but it’s not huge,’’ Bivens said. “At the macro level, my guess is that it won’t be a game-changer.’’

    The continued willingness of consumers to spend has kept the economy humming despite more than a year of dramatically rising interest rates. Consumers have had the financial wherewithal to load up Amazon shopping carts, go out for dinner and buy everything from lawn furniture to new refrigerators, in part because the government spent around $5 trillion since 2020 to cushion the economic damage from COVID-19.

    But those pandemic relief programs, including the student loan moratorium, are ending and adding to the obstacles the economy is facing.

    The suspension of loan payments “had given people a bit more money in the pocket, and they’ve gone out and they’ve spent that money,’’ said Neil Saunders, managing director of the GlobalData Retail consultancy.

    Deutsche Bank analysts who follow the retail industry estimate that the resumption of the loan payments could shrink consumer spending by $14 billion a month, or an average of $305 per borrower. The biggest blow, they say, will likely be absorbed by online commerce and mail-order companies and by restaurants and bars.

    Among the individual companies that could be hurt, according to the Deutsche Bank analysis, are Macy’s, Target and Kohl’s. The largest retailer, Walmart, is thought to be insulated from major damage because of its grocery business. (Walmart is also the nation's largest grocer.)

    Dollar stores and other discounters might even benefit if more financially squeezed consumers turn to bargain-hunting.

    Jan Hatzius, chief economist at Goldman Sachs, and his colleagues say they expect the end of the student loan moratorium to impose a “modest drag’’ on the economy, shaving 0.2% off growth in consumer spending this year. The dent to spending would have been half as much, they say, if the Supreme Court had allowed the Biden debt forgiveness program to proceed.

    The economy has endured a wild ride since COVID-19 hit in early 2020. A deep recession engulfed the economy in March and April that year. Massive government aid fueled a rebound of surprising speed, strength and resilience.

    But it came at a price: Surging demand from consumers overwhelmed the world’s factories, ports and freight yards, resulting in delays, shortages — and much higher prices. Inflation surged last year to heights not seen since the early 1980s.

    In response, the Fed began jacking up its benchmark short-term rate in March 2022. Since then, it’s raised its key rate 10 times. Higher borrowing costs have had the intended effect of slowing the economy and price acceleration. From a year-over-year peak of 9.1% in June 2022, consumer price inflation fell to 4% in May. Yet that’s still twice the Fed’s 2% target. So the central bank has signaled that more rate hike are likely this year.

    At the same time, the government has been phasing out pandemic relief. Extended unemployment aid ended in September 2021. An expansion of the food stamps program ended this year.

    The savings that Americans had socked away beginning at the peak of the pandemic — when they were receiving government relief checks and saving money while hunkered down at home — are evaporating. Fed researchers have reported that any “excess’’ pandemic savings probably dried up in the first three months of 2023.

    Despite everything, the economy has proved surprisingly durable. The government last week sharply upgraded its estimate of January-through-March economic growth to a 2% annual rate and said consumers were spending at their fastest pace in nearly two years. Factor in a still-robust job market — employers keep hiring briskly, and unemployment, at 3.7%, is barely above a half-century low — and the economy has repeatedly outrun predictions, first sounded more than a year ago, that a recession was inevitable.

    “The economy has really powered through it,’’ Bivens said. “So what is the straw that breaks the camel’s back? My guess is it’s not this. I don’t think it’s a big-enough thing.’’

    Still, Bivens said, he worries about the Fed rate hikes and federal cutbacks, including the end of the student loan payment moratorium, “throwing more contractionary shocks’’ at an American economy that has defied the doubters — at least for now.

    ___

    AP Retail Writer Anne D'Innocenzio contributed to this report from New York.


    THE STUDENT LOAN RELIEF ONE GETS ME.  So… We bail out the billionaires but continue to handcuff the every day worker and not bail them out…
    I’d argue that people with college and graduate degrees aren’t the everyday workers.  If I’m not mistaken, half of the student load debt was for grad school.  
    If you still or have a student loan that is haunting you then you are an everyday worker.
    I don't know what "haunting" means.  If you're making 200k a year but you still have 60k in student loan debt, are you really worse off than the person making $20 per hour?  I don't think so.  Remember that 46% of debt is held by graduate students, not undergrad.  

    I think you could do things like freeze interest or tie it to the discount rate and that would be very helpful.  But waiving student loan debt is a benefit to the class of Americans most likely to have high incomes.  It's regressive in nature, in my opinion, not progressive. 
    "I don't know what haunting means" 

    It's something that a bunch of people are going through and on the outside it doesn't make sense but when you know so many people that are going through this it makes more sense.

    Read about the people it is effecting. The debt is actually crippling their efforts to grow financially.  When you pay into something for years and the amount owed doesn't move that is predatory lending.  It's leeches sucking people dry.
  • Options
    mrussel1mrussel1 Posts: 28,709
    mrussel1 said:
    Not saying they made correct choices. I am just saying there are likely millions of regular people (not just mostly grad students making 200k plus) drowning in debt while their student loans have been in deferment. Toss in an extra few hundred dollars a month for those loan payments and they're going to be in even worse shape. 
    But are these people poor, or are they just not advancing at the rate they expected, economically?  In other words, is the problem that they can't buy a house, have kids?  Or are they literally moving into section 8 housing like the real poor people in this country?  My guess is the latter.  But their perspective is different.  Because they were educated enough to know to go to college and take loans (and needed full tuition, not reduced like a real disadvantaged person would receive), I'm guessing most came from middle to upper middle class families.  So what they expect out of life is very different than what someone growing up in East Baltimore or Camden expects.  I don't have data to back up these statements, but I do know that colleges have funds for the truly disadvantaged and are generous with them. 
    I don't know man. I just disagreed with your original point that they're not "everyday workers." Everyone of them I talk to owns a house and most are drowning in debt and do not make over 200k/year. I suspect I will be starting to include their student loans in their cashout refi applications in the near future when they have to start paying them back again. 
    I guess it depends on your definition of everyday workers.  I think of non college grads as an everyday worker, not necessarily white collar professionals.  But that distinction doesn't really matter in the grand scheme of the discussion.  I'm not saying they aren't drowning in debt.  I'm sure they are.  But that was driven by bad decisions and they are still the most likely to be gainfully employed.  I would much prefer equity programs that help the disadvantaged.  I don't consider someone employed, with a home, as disadvantaged.  
  • Options
    tempo_n_groovetempo_n_groove Posts: 39,124
    mrussel1 said:
    mrussel1 said:
    Not saying they made correct choices. I am just saying there are likely millions of regular people (not just mostly grad students making 200k plus) drowning in debt while their student loans have been in deferment. Toss in an extra few hundred dollars a month for those loan payments and they're going to be in even worse shape. 
    But are these people poor, or are they just not advancing at the rate they expected, economically?  In other words, is the problem that they can't buy a house, have kids?  Or are they literally moving into section 8 housing like the real poor people in this country?  My guess is the latter.  But their perspective is different.  Because they were educated enough to know to go to college and take loans (and needed full tuition, not reduced like a real disadvantaged person would receive), I'm guessing most came from middle to upper middle class families.  So what they expect out of life is very different than what someone growing up in East Baltimore or Camden expects.  I don't have data to back up these statements, but I do know that colleges have funds for the truly disadvantaged and are generous with them. 
    I don't know man. I just disagreed with your original point that they're not "everyday workers." Everyone of them I talk to owns a house and most are drowning in debt and do not make over 200k/year. I suspect I will be starting to include their student loans in their cashout refi applications in the near future when they have to start paying them back again. 
    I guess it depends on your definition of everyday workers.  I think of non college grads as an everyday worker, not necessarily white collar professionals.  But that distinction doesn't really matter in the grand scheme of the discussion.  I'm not saying they aren't drowning in debt.  I'm sure they are.  But that was driven by bad decisions and they are still the most likely to be gainfully employed.  I would much prefer equity programs that help the disadvantaged.  I don't consider someone employed, with a home, as disadvantaged.  
    Most of these people can't afford homes.  Why?  Because of the ton of student debt...

    You're not going to get it so I'll move along.
  • Options
    mrussel1mrussel1 Posts: 28,709
    mrussel1 said:
    mrussel1 said:
    mickeyrat said:
    struck me as something to note and watch....


     
    Retailers, beware: Resumption of student loan payments could lead some buyers to pull back
    By Paul Wiseman
    Yesterday

    WASHINGTON (AP) — The reprieve is over. Just as the American economy is struggling with high inflation and interest rates, the coming resumption of student loan payments poses yet another potential challenge.

    The suspension of federal student loan payments, which took effect at the height of the pandemic in 2020, expires late this summer. Interest will start accruing again in September. Payments will resume in October.

    Though many hoped their loans might at least be lightened, the Supreme Court last week struck down a Biden administration plan that would have given millions of people some relief from the return of the loan payments. The Biden plan would have canceled up to $20,000 in federal student loans for 43 million borrowers; 20 million would have had their loans erased entirely. The court ruled that the plan exceeded the government’s authority.

    The restart of those payments will force many people to start paying hundreds of dollars in loans each month — money they had been spending elsewhere for the past three years. Their pullback in spending on goods and services won't likely make a serious dent in the $26 trillion U.S. economy, the world's largest. Any pain instead will likely be concentrated in a few industries, notably e-commerce companies, bars and restaurants and some major retailers.

    Even if all that won't be enough to weaken overall economic growth, the shift in spending by many young adults could inject further uncertainty into an economy already beset by uncertainties, from whether the Fed will manage to tame inflation and halt its interest rate hikes to whether a recession is destined to strike by next year, as many economists still fear.

    Josh Bivens, chief economist at the Economic Policy Institute think tank, suggested that the likely hit to the economy might amount to perhaps one-third of a percentage point of gross domestic product — the nation's total output of goods and services — or about $85 billion or $90 billion a year.

    It's “not trivial, but it’s not huge,’’ Bivens said. “At the macro level, my guess is that it won’t be a game-changer.’’

    The continued willingness of consumers to spend has kept the economy humming despite more than a year of dramatically rising interest rates. Consumers have had the financial wherewithal to load up Amazon shopping carts, go out for dinner and buy everything from lawn furniture to new refrigerators, in part because the government spent around $5 trillion since 2020 to cushion the economic damage from COVID-19.

    But those pandemic relief programs, including the student loan moratorium, are ending and adding to the obstacles the economy is facing.

    The suspension of loan payments “had given people a bit more money in the pocket, and they’ve gone out and they’ve spent that money,’’ said Neil Saunders, managing director of the GlobalData Retail consultancy.

    Deutsche Bank analysts who follow the retail industry estimate that the resumption of the loan payments could shrink consumer spending by $14 billion a month, or an average of $305 per borrower. The biggest blow, they say, will likely be absorbed by online commerce and mail-order companies and by restaurants and bars.

    Among the individual companies that could be hurt, according to the Deutsche Bank analysis, are Macy’s, Target and Kohl’s. The largest retailer, Walmart, is thought to be insulated from major damage because of its grocery business. (Walmart is also the nation's largest grocer.)

    Dollar stores and other discounters might even benefit if more financially squeezed consumers turn to bargain-hunting.

    Jan Hatzius, chief economist at Goldman Sachs, and his colleagues say they expect the end of the student loan moratorium to impose a “modest drag’’ on the economy, shaving 0.2% off growth in consumer spending this year. The dent to spending would have been half as much, they say, if the Supreme Court had allowed the Biden debt forgiveness program to proceed.

    The economy has endured a wild ride since COVID-19 hit in early 2020. A deep recession engulfed the economy in March and April that year. Massive government aid fueled a rebound of surprising speed, strength and resilience.

    But it came at a price: Surging demand from consumers overwhelmed the world’s factories, ports and freight yards, resulting in delays, shortages — and much higher prices. Inflation surged last year to heights not seen since the early 1980s.

    In response, the Fed began jacking up its benchmark short-term rate in March 2022. Since then, it’s raised its key rate 10 times. Higher borrowing costs have had the intended effect of slowing the economy and price acceleration. From a year-over-year peak of 9.1% in June 2022, consumer price inflation fell to 4% in May. Yet that’s still twice the Fed’s 2% target. So the central bank has signaled that more rate hike are likely this year.

    At the same time, the government has been phasing out pandemic relief. Extended unemployment aid ended in September 2021. An expansion of the food stamps program ended this year.

    The savings that Americans had socked away beginning at the peak of the pandemic — when they were receiving government relief checks and saving money while hunkered down at home — are evaporating. Fed researchers have reported that any “excess’’ pandemic savings probably dried up in the first three months of 2023.

    Despite everything, the economy has proved surprisingly durable. The government last week sharply upgraded its estimate of January-through-March economic growth to a 2% annual rate and said consumers were spending at their fastest pace in nearly two years. Factor in a still-robust job market — employers keep hiring briskly, and unemployment, at 3.7%, is barely above a half-century low — and the economy has repeatedly outrun predictions, first sounded more than a year ago, that a recession was inevitable.

    “The economy has really powered through it,’’ Bivens said. “So what is the straw that breaks the camel’s back? My guess is it’s not this. I don’t think it’s a big-enough thing.’’

    Still, Bivens said, he worries about the Fed rate hikes and federal cutbacks, including the end of the student loan payment moratorium, “throwing more contractionary shocks’’ at an American economy that has defied the doubters — at least for now.

    ___

    AP Retail Writer Anne D'Innocenzio contributed to this report from New York.


    THE STUDENT LOAN RELIEF ONE GETS ME.  So… We bail out the billionaires but continue to handcuff the every day worker and not bail them out…
    I’d argue that people with college and graduate degrees aren’t the everyday workers.  If I’m not mistaken, half of the student load debt was for grad school.  
    If you still or have a student loan that is haunting you then you are an everyday worker.
    I don't know what "haunting" means.  If you're making 200k a year but you still have 60k in student loan debt, are you really worse off than the person making $20 per hour?  I don't think so.  Remember that 46% of debt is held by graduate students, not undergrad.  

    I think you could do things like freeze interest or tie it to the discount rate and that would be very helpful.  But waiving student loan debt is a benefit to the class of Americans most likely to have high incomes.  It's regressive in nature, in my opinion, not progressive. 
    "I don't know what haunting means" 

    It's something that a bunch of people are going through and on the outside it doesn't make sense but when you know so many people that are going through this it makes more sense.

    Read about the people it is effecting. The debt is actually crippling their efforts to grow financially.  When you pay into something for years and the amount owed doesn't move that is predatory lending.  It's leeches sucking people dry.
    Remember that only federal loans were eligible.  In those cases, the interest today is 5% for undergrad and 6.5% for grad.  How is that predatory?  You can't make payments for years and not make a dent into loans with that interest.  Plus the interest has not been accruing for over three years.  
    Also, I do think the fed could link the interest to the discount rate, which is currently 5.25% for the grad students. But that has been like 1% for the last decade, up until the rate hikes over the last year+
  • Options
    mrussel1mrussel1 Posts: 28,709
    mrussel1 said:
    mrussel1 said:
    Not saying they made correct choices. I am just saying there are likely millions of regular people (not just mostly grad students making 200k plus) drowning in debt while their student loans have been in deferment. Toss in an extra few hundred dollars a month for those loan payments and they're going to be in even worse shape. 
    But are these people poor, or are they just not advancing at the rate they expected, economically?  In other words, is the problem that they can't buy a house, have kids?  Or are they literally moving into section 8 housing like the real poor people in this country?  My guess is the latter.  But their perspective is different.  Because they were educated enough to know to go to college and take loans (and needed full tuition, not reduced like a real disadvantaged person would receive), I'm guessing most came from middle to upper middle class families.  So what they expect out of life is very different than what someone growing up in East Baltimore or Camden expects.  I don't have data to back up these statements, but I do know that colleges have funds for the truly disadvantaged and are generous with them. 
    I don't know man. I just disagreed with your original point that they're not "everyday workers." Everyone of them I talk to owns a house and most are drowning in debt and do not make over 200k/year. I suspect I will be starting to include their student loans in their cashout refi applications in the near future when they have to start paying them back again. 
    I guess it depends on your definition of everyday workers.  I think of non college grads as an everyday worker, not necessarily white collar professionals.  But that distinction doesn't really matter in the grand scheme of the discussion.  I'm not saying they aren't drowning in debt.  I'm sure they are.  But that was driven by bad decisions and they are still the most likely to be gainfully employed.  I would much prefer equity programs that help the disadvantaged.  I don't consider someone employed, with a home, as disadvantaged.  
    Most of these people can't afford homes.  Why?  Because of the ton of student debt...

    You're not going to get it so I'll move along.
    dont' get frustrated.  That's why we debate.  What do you mean I'm not going to get it? It's not like it's a complicated argument.  It's about perspective.  Do Americans have a right to a home?  Does a person that's gainfully employed deserve a significant debt reduction and a poor person in Baltimore doesn't?  That's the question for me.  Why do the bad choices by college grads deserve a break when bad choices (or disadvantage) don't?  
  • Options
    The JugglerThe Juggler Behind that bush over there. Posts: 47,359
    mrussel1 said:
    mrussel1 said:
    Not saying they made correct choices. I am just saying there are likely millions of regular people (not just mostly grad students making 200k plus) drowning in debt while their student loans have been in deferment. Toss in an extra few hundred dollars a month for those loan payments and they're going to be in even worse shape. 
    But are these people poor, or are they just not advancing at the rate they expected, economically?  In other words, is the problem that they can't buy a house, have kids?  Or are they literally moving into section 8 housing like the real poor people in this country?  My guess is the latter.  But their perspective is different.  Because they were educated enough to know to go to college and take loans (and needed full tuition, not reduced like a real disadvantaged person would receive), I'm guessing most came from middle to upper middle class families.  So what they expect out of life is very different than what someone growing up in East Baltimore or Camden expects.  I don't have data to back up these statements, but I do know that colleges have funds for the truly disadvantaged and are generous with them. 
    I don't know man. I just disagreed with your original point that they're not "everyday workers." Everyone of them I talk to owns a house and most are drowning in debt and do not make over 200k/year. I suspect I will be starting to include their student loans in their cashout refi applications in the near future when they have to start paying them back again. 
    I guess it depends on your definition of everyday workers.  I think of non college grads as an everyday worker, not necessarily white collar professionals.  But that distinction doesn't really matter in the grand scheme of the discussion.  I'm not saying they aren't drowning in debt.  I'm sure they are.  But that was driven by bad decisions and they are still the most likely to be gainfully employed.  I would much prefer equity programs that help the disadvantaged.  I don't consider someone employed, with a home, as disadvantaged.  
    I guess we agree. That was my main point. Things are going to get a lot tougher for them once they have start paying again. 
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  • Options
    MayDay10MayDay10 Posts: 11,612
    I get many of the reasons to make the debt go away, but I don't think it is right to just waive a magic wand and absolve everyone.  I had about $35K in student load debt, made a lot of sacrifices in my 20s, didn't go on a vacation until I was nearly 30, lived within my means in order to pay it off.  In about 8 years, Ill have kids in college, and I don't expect them to get 'free' college. Even at the age of 44, I haven't been across the ocean yet, mainly because post-college I had to pay the bills.

    Higher education and the finance of it needs a lot of reform.  They need to teach personal finance in high school as well.  

    As far as the existing debt, it seems like a stalemate.  Can't keep people drowning in it either.  I always thought maybe the government can absolve the debt, but get something in value for those who want to have their debt removed.  Community service?  Military service?  
  • Options
    Halifax2TheMaxHalifax2TheMax Posts: 36,705
    edited July 2023
    Is Jeff Bozos disadvantaged? It’s not just about “poor choices.”

    From the linked article below:

    Average Student Loan Debt in the United States

    • $1.75 trillion in total student loan debt (including federal and private loans)
    • $28,950 owed per borrower on average
    • About 92% of all student debt are federal student loans; the remaining amount is private student loans
    • 55% of students from public four-year institutions had student loans
    • 57% of students from private nonprofit four-year institutions took on education debt

    Average Student Loan Debt by State

    The national average balance of federal student loan borrowers is $35,210. The five states and territories with the highest balance are as follows:

    1. Washington, D.C. $54,708.52

    2. Maryland. $42,350.91

    3. Georgia. $40,268.87

    4. Virginia. $38,251.37

    5. Florida. $37,709.72

    Average Student Loan Debt by Age

    Student loan debt is usually associated with young adults, with those 24 and younger having the lowest average balances. Average balances also increase by age group, with those 62 and older having the highest balance.

    Average Student Loan Debt by Race and Gender

    Although most college students take out student loans, women and people of color are more likely to have student loan debt—and higher balances—than their white male counterparts.

    Average Student Loan Debt for Men and Women

    • 47% of women hold student loan debt
    • 40% of men hold student loan debt

    Source: Federal Reserve of St. Louis

    Average Student Loan Debt by Race

    • 50% of Black adults have student loan debt, with an average balance of $9,800
    • 44% of white adults have student loan debt, with an average balance of $8,700
    • 37% of Hispanic/Latino adults have student loan debt, with an average balance of $7,000

    Source: Federal Reserve of St. Louis

    Federal Student Loan Portfolio

    Federal student loans make up the vast majority of American education debt—about 92% of all outstanding student loans is federal debt. The federal student loan portfolio currently totals more than $1.6 trillion, owed by about 43 million borrowers. Here’s how that debt breaks down by loan type.

    Federal Student Loans by Age

    Unsurprisingly, younger people hold the majority of student loan debt. Borrowers between the ages of 25 and 34 carry about $500 billion in federal student loans—the majority of people in this age group owe between $10,000 and $40,000.

    However, people carry their education debt well into middle-age and beyond. Borrowers ages 35 to 49 owe more than $620 billion in student loans. This cohort has the highest number of borrowers who owe more than $100,000 in loans.

    Even retirees feel the pressure from student loans; there are 2.4 million borrowers aged 62 or older that owe $98 billion in student loans.

    https://www.forbes.com/advisor/student-loans/average-student-loan-debt-statistics/


    09/15/1998 & 09/16/1998, Mansfield, MA; 08/29/00 08/30/00, Mansfield, MA; 07/02/03, 07/03/03, Mansfield, MA; 09/28/04, 09/29/04, Boston, MA; 09/22/05, Halifax, NS; 05/24/06, 05/25/06, Boston, MA; 07/22/06, 07/23/06, Gorge, WA; 06/27/2008, Hartford; 06/28/08, 06/30/08, Mansfield; 08/18/2009, O2, London, UK; 10/30/09, 10/31/09, Philadelphia, PA; 05/15/10, Hartford, CT; 05/17/10, Boston, MA; 05/20/10, 05/21/10, NY, NY; 06/22/10, Dublin, IRE; 06/23/10, Northern Ireland; 09/03/11, 09/04/11, Alpine Valley, WI; 09/11/11, 09/12/11, Toronto, Ont; 09/14/11, Ottawa, Ont; 09/15/11, Hamilton, Ont; 07/02/2012, Prague, Czech Republic; 07/04/2012 & 07/05/2012, Berlin, Germany; 07/07/2012, Stockholm, Sweden; 09/30/2012, Missoula, MT; 07/16/2013, London, Ont; 07/19/2013, Chicago, IL; 10/15/2013 & 10/16/2013, Worcester, MA; 10/21/2013 & 10/22/2013, Philadelphia, PA; 10/25/2013, Hartford, CT; 11/29/2013, Portland, OR; 11/30/2013, Spokane, WA; 12/04/2013, Vancouver, BC; 12/06/2013, Seattle, WA; 10/03/2014, St. Louis. MO; 10/22/2014, Denver, CO; 10/26/2015, New York, NY; 04/23/2016, New Orleans, LA; 04/28/2016 & 04/29/2016, Philadelphia, PA; 05/01/2016 & 05/02/2016, New York, NY; 05/08/2016, Ottawa, Ont.; 05/10/2016 & 05/12/2016, Toronto, Ont.; 08/05/2016 & 08/07/2016, Boston, MA; 08/20/2016 & 08/22/2016, Chicago, IL; 07/01/2018, Prague, Czech Republic; 07/03/2018, Krakow, Poland; 07/05/2018, Berlin, Germany; 09/02/2018 & 09/04/2018, Boston, MA; 09/08/2022, Toronto, Ont; 09/11/2022, New York, NY; 09/14/2022, Camden, NJ; 09/02/2023, St. Paul, MN;

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  • Options
    mrussel1mrussel1 Posts: 28,709
    Is Jeff Bozos disadvantaged? It’s not just about “poor choices.”

    From the linked article below:

    Average Student Loan Debt in the United States

    • $1.75 trillion in total student loan debt (including federal and private loans)
    • $28,950 owed per borrower on average
    • About 92% of all student debt are federal student loans; the remaining amount is private student loans
    • 55% of students from public four-year institutions had student loans
    • 57% of students from private nonprofit four-year institutions took on education debt

    Average Student Loan Debt by State

    The national average balance of federal student loan borrowers is $35,210. The five states and territories with the highest balance are as follows:

    1. Washington, D.C. $54,708.52

    2. Maryland. $42,350.91

    3. Georgia. $40,268.87

    4. Virginia. $38,251.37

    5. Florida. $37,709.72

    Average Student Loan Debt by Age

    Student loan debt is usually associated with young adults, with those 24 and younger having the lowest average balances. Average balances also increase by age group, with those 62 and older having the highest balance.

    Average Student Loan Debt by Race and Gender

    Although most college students take out student loans, women and people of color are more likely to have student loan debt—and higher balances—than their white male counterparts.

    Average Student Loan Debt for Men and Women

    • 47% of women hold student loan debt
    • 40% of men hold student loan debt

    Source: Federal Reserve of St. Louis

    Average Student Loan Debt by Race

    • 50% of Black adults have student loan debt, with an average balance of $9,800
    • 44% of white adults have student loan debt, with an average balance of $8,700
    • 37% of Hispanic/Latino adults have student loan debt, with an average balance of $7,000

    Source: Federal Reserve of St. Louis

    Federal Student Loan Portfolio

    Federal student loans make up the vast majority of American education debt—about 92% of all outstanding student loans is federal debt. The federal student loan portfolio currently totals more than $1.6 trillion, owed by about 43 million borrowers. Here’s how that debt breaks down by loan type.

    Federal Student Loans by Age

    Unsurprisingly, younger people hold the majority of student loan debt. Borrowers between the ages of 25 and 34 carry about $500 billion in federal student loans—the majority of people in this age group owe between $10,000 and $40,000.

    However, people carry their education debt well into middle-age and beyond. Borrowers ages 35 to 49 owe more than $620 billion in student loans. This cohort has the highest number of borrowers who owe more than $100,000 in loans.

    Even retirees feel the pressure from student loans; there are 2.4 million borrowers aged 62 or older that owe $98 billion in student loans.

    https://www.forbes.com/advisor/student-loans/average-student-loan-debt-statistics/


    Interesting stats but I don't understand what your point is, particularly with Bezos.  

    And to be clear, I'm not saying that having student debt is about poor choices.  I'm saying that crushing debt can often lead back to poor choices.  How many people went to private schools?  How many went to out of state public?  How many chose any of those rather than doing two years of JUCO before transferring to public?  What about graduate school?  I didn't go until I landed at a company that paid for grad school for anything other than something that was extremely specific, like medical school.  History grad?  Paid.  Law school?  Paid.  This is not uncommon today.  I also had a good job when I was in college (restaurant management) and took a 10k pay cut to get an entry level job at a bank call center.  I did it because they paid for college.  People can be smarter, but their parents need to be smart too, and that's the core issue.  

    My son wants to go to law school or get an MBA.  I told him he would be a fool to do either of those and pay for it himself.  He needs to get a job at a place that will pay for your post graduate with a commitment of somewhere between 2 and 5 years.  It's been common for 15 years now.  
  • Options
    mrussel1mrussel1 Posts: 28,709
    MayDay10 said:
    I get many of the reasons to make the debt go away, but I don't think it is right to just waive a magic wand and absolve everyone.  I had about $35K in student load debt, made a lot of sacrifices in my 20s, didn't go on a vacation until I was nearly 30, lived within my means in order to pay it off.  In about 8 years, Ill have kids in college, and I don't expect them to get 'free' college. Even at the age of 44, I haven't been across the ocean yet, mainly because post-college I had to pay the bills.

    Higher education and the finance of it needs a lot of reform.  They need to teach personal finance in high school as well.  

    As far as the existing debt, it seems like a stalemate.  Can't keep people drowning in it either.  I always thought maybe the government can absolve the debt, but get something in value for those who want to have their debt removed.  Community service?  Military service?  
    I think that would be a fantastic tradeoff.  Biden should have done that.  I also think that two years of JUCO should be paid by the gov't going forward.  
  • Options
    Halifax2TheMaxHalifax2TheMax Posts: 36,705
    mrussel1 said:
    Is Jeff Bozos disadvantaged? It’s not just about “poor choices.”

    From the linked article below:

    Average Student Loan Debt in the United States

    • $1.75 trillion in total student loan debt (including federal and private loans)
    • $28,950 owed per borrower on average
    • About 92% of all student debt are federal student loans; the remaining amount is private student loans
    • 55% of students from public four-year institutions had student loans
    • 57% of students from private nonprofit four-year institutions took on education debt

    Average Student Loan Debt by State

    The national average balance of federal student loan borrowers is $35,210. The five states and territories with the highest balance are as follows:

    1. Washington, D.C. $54,708.52

    2. Maryland. $42,350.91

    3. Georgia. $40,268.87

    4. Virginia. $38,251.37

    5. Florida. $37,709.72

    Average Student Loan Debt by Age

    Student loan debt is usually associated with young adults, with those 24 and younger having the lowest average balances. Average balances also increase by age group, with those 62 and older having the highest balance.

    Average Student Loan Debt by Race and Gender

    Although most college students take out student loans, women and people of color are more likely to have student loan debt—and higher balances—than their white male counterparts.

    Average Student Loan Debt for Men and Women

    • 47% of women hold student loan debt
    • 40% of men hold student loan debt

    Source: Federal Reserve of St. Louis

    Average Student Loan Debt by Race

    • 50% of Black adults have student loan debt, with an average balance of $9,800
    • 44% of white adults have student loan debt, with an average balance of $8,700
    • 37% of Hispanic/Latino adults have student loan debt, with an average balance of $7,000

    Source: Federal Reserve of St. Louis

    Federal Student Loan Portfolio

    Federal student loans make up the vast majority of American education debt—about 92% of all outstanding student loans is federal debt. The federal student loan portfolio currently totals more than $1.6 trillion, owed by about 43 million borrowers. Here’s how that debt breaks down by loan type.

    Federal Student Loans by Age

    Unsurprisingly, younger people hold the majority of student loan debt. Borrowers between the ages of 25 and 34 carry about $500 billion in federal student loans—the majority of people in this age group owe between $10,000 and $40,000.

    However, people carry their education debt well into middle-age and beyond. Borrowers ages 35 to 49 owe more than $620 billion in student loans. This cohort has the highest number of borrowers who owe more than $100,000 in loans.

    Even retirees feel the pressure from student loans; there are 2.4 million borrowers aged 62 or older that owe $98 billion in student loans.

    https://www.forbes.com/advisor/student-loans/average-student-loan-debt-statistics/


    Interesting stats but I don't understand what your point is, particularly with Bezos.  

    And to be clear, I'm not saying that having student debt is about poor choices.  I'm saying that crushing debt can often lead back to poor choices.  How many people went to private schools?  How many went to out of state public?  How many chose any of those rather than doing two years of JUCO before transferring to public?  What about graduate school?  I didn't go until I landed at a company that paid for grad school for anything other than something that was extremely specific, like medical school.  History grad?  Paid.  Law school?  Paid.  This is not uncommon today.  I also had a good job when I was in college (restaurant management) and took a 10k pay cut to get an entry level job at a bank call center.  I did it because they paid for college.  People can be smarter, but their parents need to be smart too, and that's the core issue.  

    My son wants to go to law school or get an MBA.  I told him he would be a fool to do either of those and pay for it himself.  He needs to get a job at a place that will pay for your post graduate with a commitment of somewhere between 2 and 5 years.  It's been common for 15 years now.  
    I believe you are/were an advocate of Bozos and government subsidies for expanding Amazon headquarters, yes? Why is one American worthy or more worthy than tens of thousands of other Americans? Particularly if you consider disposable income and its effect on the economy? Aren’t student loan borrowers contributing to the economy by spending/consuming disposable income? I get the job creation of Bozos but he’s got billions to fund his own or Amazon’s capital investment(s), right? Student loan borrowers, not so much. I’m not sure how many student loan borrowers borrow money for college because, hey, why not? Do you think kids take out loans but are able to pay for college without them?

    The demographics of the student loan borrowers indicates to me that many borrowers are coming from limited means, whether single parent or one income earning parent households, renters, thus unable to tap equity wealth and also having to pay more for the full boat of tuition, housing, etc. Easy to say live at home, which is fine, but tuition and fees are still a struggle. There were kids embarrassed to take college classes via zoom during Covid because they were essentially homeless and zoomed in from their car or a shelter. Not everyone starts from an equal playing field. Read the article I linked. Why has the default rate among private loan borrowers steadily gone down overtime? More resources perhaps? Higher paying jobs upon graduation, maybe?

    Are you in favour of states making JUCO free with auto acceptance to a 4 year state school upon a minimum GPA?

    I see some of the repub opposition to this as a result of who it helps, women, shouldn’t be in the workplace to begin with, and the “other,” who will also take jobs from white males. Repubs cut taxes for corporations from 35% to 24% and for millionaires and billionaires, who pay effectively 5% to 7% and represent the top 1%. Basically subsidizing their lifestyle but god forbid we help out that bottom 20% to 80%. You know, trickle down.
    09/15/1998 & 09/16/1998, Mansfield, MA; 08/29/00 08/30/00, Mansfield, MA; 07/02/03, 07/03/03, Mansfield, MA; 09/28/04, 09/29/04, Boston, MA; 09/22/05, Halifax, NS; 05/24/06, 05/25/06, Boston, MA; 07/22/06, 07/23/06, Gorge, WA; 06/27/2008, Hartford; 06/28/08, 06/30/08, Mansfield; 08/18/2009, O2, London, UK; 10/30/09, 10/31/09, Philadelphia, PA; 05/15/10, Hartford, CT; 05/17/10, Boston, MA; 05/20/10, 05/21/10, NY, NY; 06/22/10, Dublin, IRE; 06/23/10, Northern Ireland; 09/03/11, 09/04/11, Alpine Valley, WI; 09/11/11, 09/12/11, Toronto, Ont; 09/14/11, Ottawa, Ont; 09/15/11, Hamilton, Ont; 07/02/2012, Prague, Czech Republic; 07/04/2012 & 07/05/2012, Berlin, Germany; 07/07/2012, Stockholm, Sweden; 09/30/2012, Missoula, MT; 07/16/2013, London, Ont; 07/19/2013, Chicago, IL; 10/15/2013 & 10/16/2013, Worcester, MA; 10/21/2013 & 10/22/2013, Philadelphia, PA; 10/25/2013, Hartford, CT; 11/29/2013, Portland, OR; 11/30/2013, Spokane, WA; 12/04/2013, Vancouver, BC; 12/06/2013, Seattle, WA; 10/03/2014, St. Louis. MO; 10/22/2014, Denver, CO; 10/26/2015, New York, NY; 04/23/2016, New Orleans, LA; 04/28/2016 & 04/29/2016, Philadelphia, PA; 05/01/2016 & 05/02/2016, New York, NY; 05/08/2016, Ottawa, Ont.; 05/10/2016 & 05/12/2016, Toronto, Ont.; 08/05/2016 & 08/07/2016, Boston, MA; 08/20/2016 & 08/22/2016, Chicago, IL; 07/01/2018, Prague, Czech Republic; 07/03/2018, Krakow, Poland; 07/05/2018, Berlin, Germany; 09/02/2018 & 09/04/2018, Boston, MA; 09/08/2022, Toronto, Ont; 09/11/2022, New York, NY; 09/14/2022, Camden, NJ; 09/02/2023, St. Paul, MN;

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    tempo_n_groovetempo_n_groove Posts: 39,124
    MayDay10 said:
    I get many of the reasons to make the debt go away, but I don't think it is right to just waive a magic wand and absolve everyone.  I had about $35K in student load debt, made a lot of sacrifices in my 20s, didn't go on a vacation until I was nearly 30, lived within my means in order to pay it off.  In about 8 years, Ill have kids in college, and I don't expect them to get 'free' college. Even at the age of 44, I haven't been across the ocean yet, mainly because post-college I had to pay the bills.

    Higher education and the finance of it needs a lot of reform.  They need to teach personal finance in high school as well.  

    As far as the existing debt, it seems like a stalemate.  Can't keep people drowning in it either.  I always thought maybe the government can absolve the debt, but get something in value for those who want to have their debt removed.  Community service?  Military service?  
    I personally think EVERYONE should have to enlist in the military at 18.
    In turn you'd get college and medical for your troubles.

    They do it now so why not have everyone do it.  You can have 2 year signups and 4 year signups.

    This is coming from someone whom didn't enlist and sees the overall benefits of it now though.
  • Options
    The JugglerThe Juggler Behind that bush over there. Posts: 47,359
    Everyone should have to join the army? What? Hell no! lol
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    tempo_n_groovetempo_n_groove Posts: 39,124
    mrussel1 said:
    mrussel1 said:
    mrussel1 said:
    Not saying they made correct choices. I am just saying there are likely millions of regular people (not just mostly grad students making 200k plus) drowning in debt while their student loans have been in deferment. Toss in an extra few hundred dollars a month for those loan payments and they're going to be in even worse shape. 
    But are these people poor, or are they just not advancing at the rate they expected, economically?  In other words, is the problem that they can't buy a house, have kids?  Or are they literally moving into section 8 housing like the real poor people in this country?  My guess is the latter.  But their perspective is different.  Because they were educated enough to know to go to college and take loans (and needed full tuition, not reduced like a real disadvantaged person would receive), I'm guessing most came from middle to upper middle class families.  So what they expect out of life is very different than what someone growing up in East Baltimore or Camden expects.  I don't have data to back up these statements, but I do know that colleges have funds for the truly disadvantaged and are generous with them. 
    I don't know man. I just disagreed with your original point that they're not "everyday workers." Everyone of them I talk to owns a house and most are drowning in debt and do not make over 200k/year. I suspect I will be starting to include their student loans in their cashout refi applications in the near future when they have to start paying them back again. 
    I guess it depends on your definition of everyday workers.  I think of non college grads as an everyday worker, not necessarily white collar professionals.  But that distinction doesn't really matter in the grand scheme of the discussion.  I'm not saying they aren't drowning in debt.  I'm sure they are.  But that was driven by bad decisions and they are still the most likely to be gainfully employed.  I would much prefer equity programs that help the disadvantaged.  I don't consider someone employed, with a home, as disadvantaged.  
    Most of these people can't afford homes.  Why?  Because of the ton of student debt...

    You're not going to get it so I'll move along.
    dont' get frustrated.  That's why we debate.  What do you mean I'm not going to get it? It's not like it's a complicated argument.  It's about perspective.  Do Americans have a right to a home?  Does a person that's gainfully employed deserve a significant debt reduction and a poor person in Baltimore doesn't?  That's the question for me.  Why do the bad choices by college grads deserve a break when bad choices (or disadvantage) don't?  
    I agree these were piss poor choices.  I say that to my GF all the time.  Unfortunately if there isn't anyone to help guide you, it doesn't mean shit.

    The reason it was predatory was these long term loans were not explained very well.

    Scenario.

    So you are going to a 25k a year school for 4 years and with your degree you'll be able to make 25K a year when you get a job, and with our payment structure you will be able to pay it off with your salary in oh, 75 years at that salary.

    Nobody was telling these kids that a cheaper college was ok or a community college was all the schooling they needed.

    People have literally paid back what they owed over the years and had barely made a dent in the principal.

    To me that's messed up.  I do numbers for a living now but when I was younger shit like this I would have missed.  My first brand new car was an example of that.  Thankfully that was only for 5 years and not my whole lifetime.
  • Options
    mrussel1mrussel1 Posts: 28,709
    mrussel1 said:
    Is Jeff Bozos disadvantaged? It’s not just about “poor choices.”

    From the linked article below:

    Average Student Loan Debt in the United States

    • $1.75 trillion in total student loan debt (including federal and private loans)
    • $28,950 owed per borrower on average
    • About 92% of all student debt are federal student loans; the remaining amount is private student loans
    • 55% of students from public four-year institutions had student loans
    • 57% of students from private nonprofit four-year institutions took on education debt

    Average Student Loan Debt by State

    The national average balance of federal student loan borrowers is $35,210. The five states and territories with the highest balance are as follows:

    1. Washington, D.C. $54,708.52

    2. Maryland. $42,350.91

    3. Georgia. $40,268.87

    4. Virginia. $38,251.37

    5. Florida. $37,709.72

    Average Student Loan Debt by Age

    Student loan debt is usually associated with young adults, with those 24 and younger having the lowest average balances. Average balances also increase by age group, with those 62 and older having the highest balance.

    Average Student Loan Debt by Race and Gender

    Although most college students take out student loans, women and people of color are more likely to have student loan debt—and higher balances—than their white male counterparts.

    Average Student Loan Debt for Men and Women

    • 47% of women hold student loan debt
    • 40% of men hold student loan debt

    Source: Federal Reserve of St. Louis

    Average Student Loan Debt by Race

    • 50% of Black adults have student loan debt, with an average balance of $9,800
    • 44% of white adults have student loan debt, with an average balance of $8,700
    • 37% of Hispanic/Latino adults have student loan debt, with an average balance of $7,000

    Source: Federal Reserve of St. Louis

    Federal Student Loan Portfolio

    Federal student loans make up the vast majority of American education debt—about 92% of all outstanding student loans is federal debt. The federal student loan portfolio currently totals more than $1.6 trillion, owed by about 43 million borrowers. Here’s how that debt breaks down by loan type.

    Federal Student Loans by Age

    Unsurprisingly, younger people hold the majority of student loan debt. Borrowers between the ages of 25 and 34 carry about $500 billion in federal student loans—the majority of people in this age group owe between $10,000 and $40,000.

    However, people carry their education debt well into middle-age and beyond. Borrowers ages 35 to 49 owe more than $620 billion in student loans. This cohort has the highest number of borrowers who owe more than $100,000 in loans.

    Even retirees feel the pressure from student loans; there are 2.4 million borrowers aged 62 or older that owe $98 billion in student loans.

    https://www.forbes.com/advisor/student-loans/average-student-loan-debt-statistics/


    Interesting stats but I don't understand what your point is, particularly with Bezos.  

    And to be clear, I'm not saying that having student debt is about poor choices.  I'm saying that crushing debt can often lead back to poor choices.  How many people went to private schools?  How many went to out of state public?  How many chose any of those rather than doing two years of JUCO before transferring to public?  What about graduate school?  I didn't go until I landed at a company that paid for grad school for anything other than something that was extremely specific, like medical school.  History grad?  Paid.  Law school?  Paid.  This is not uncommon today.  I also had a good job when I was in college (restaurant management) and took a 10k pay cut to get an entry level job at a bank call center.  I did it because they paid for college.  People can be smarter, but their parents need to be smart too, and that's the core issue.  

    My son wants to go to law school or get an MBA.  I told him he would be a fool to do either of those and pay for it himself.  He needs to get a job at a place that will pay for your post graduate with a commitment of somewhere between 2 and 5 years.  It's been common for 15 years now.  
    I believe you are/were an advocate of Bozos and government subsidies for expanding Amazon headquarters, yes? Why is one American worthy or more worthy than tens of thousands of other Americans? Particularly if you consider disposable income and its effect on the economy? Aren’t student loan borrowers contributing to the economy by spending/consuming disposable income? I get the job creation of Bozos but he’s got billions to fund his own or Amazon’s capital investment(s), right? Student loan borrowers, not so much. I’m not sure how many student loan borrowers borrow money for college because, hey, why not? Do you think kids take out loans but are able to pay for college without them?

    The demographics of the student loan borrowers indicates to me that many borrowers are coming from limited means, whether single parent or one income earning parent households, renters, thus unable to tap equity wealth and also having to pay more for the full boat of tuition, housing, etc. Easy to say live at home, which is fine, but tuition and fees are still a struggle. There were kids embarrassed to take college classes via zoom during Covid because they were essentially homeless and zoomed in from their car or a shelter. Not everyone starts from an equal playing field. Read the article I linked. Why has the default rate among private loan borrowers steadily gone down overtime? More resources perhaps? Higher paying jobs upon graduation, maybe?

    Are you in favour of states making JUCO free with auto acceptance to a 4 year state school upon a minimum GPA?

    I see some of the repub opposition to this as a result of who it helps, women, shouldn’t be in the workplace to begin with, and the “other,” who will also take jobs from white males. Repubs cut taxes for corporations from 35% to 24% and for millionaires and billionaires, who pay effectively 5% to 7% and represent the top 1%. Basically subsidizing their lifestyle but god forbid we help out that bottom 20% to 80%. You know, trickle down.
    Lot to unpack here.  I can't address it all, but if I miss something you really care about, bring  it up:

    1. Tax incentives are different than student loan waivers to me.  The number of jobs and the corresponding economic activity generated by Amazon's HQ easily offsets the tax breaks they received.  Yes waiving the student loan would theoretically generate some economic activity (who knows how much), but again my point is that this particular class of person is not the most deserving of some economic break.  I'm not being cheap, but if we're willing to add 24 billion to the debt, spend that on early pre K, better funding for schools, JUCO.  

    2. Regarding your statement about limited means, I'd like to see some data about that.  Teh data set is the average debt of a borrower and the corresponding income status of their parents.  I have never seen that data.  What I do know is that every parent MUST fill out a FAFSA every year, and that evaluates you for federal, state and university aid.  So if you are eligible, you can get it immediately and easily.  And I know that part of the reason (not the only) that tuition has increased is because so many students do receive discounted tuition.  That cost gets passed on to those of us who don't qualify.  But I would like to know the income level if you know where that is. 

    3.  Bezos is rich but he owns 6% of Amazon and could not unilaterally decide to not get a tax break.  They are a company with a .43 EPS.  That's not impressive.  As a shareholder, I would be annoyed if they passed on tax breaks considering how they have struggled financially.  

    4. Am I in favor of auto acceptance to a state U with acceptable GPA?  YES, YES and Fuck yes.  In fact, here in VA we have the greatest deal in the world.  If you graduate from a two year, you are GUARANTEED admittance to any state university so long as you meet their minimum GPA.  That means you do not have to compete.  Example:  You can get into UVA with a 3.4.  Same with William and Mary.  That is insane.  In fact, my son did not get into UVA because it is so competitive.  I encouraged him to go to JUCO and xfer rather than go to James Madison.  He decided on JMU.  I think that was a sub-optimal choice, but I can see why he didn't want to stay home for two years.  
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    The JugglerThe Juggler Behind that bush over there. Posts: 47,359
    I'm not sure if it's predatory or not. I don't truly think it is.....HOWEVER I think our country and our school systems, along with parents, have done such a shitty job preparing teens for adulthood. I know I had no idea what the hell I was doing back then and how much I would owe upon graduation. I thankfully paid mine off eventually. But a lot of people are not so lucky.

    Plus the cost of tuition, along with everything else, is so out of proportion with how much wages have grown that it's almost impossible to equate it with how we dealt with it back in the day. It's like comparing modern NFL stats with players from the 70's or 80's...it's a completely different game now. 
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