Posted On: Monday - June 6th 2022 5:43PM MST
In Topics:   University  Economics  US Feral Government  Scams  Zhou Bai Dien
See also our 2 1/2 years-ago 3 part series on student loan forgiveness. I clean forgot about them when I wrote this recent post, so this is updated 5 days later . Here they are: Part 1 -- Part 2 -- Part 3. After that, there was our post just this past April, AOC on student loan forgiveness.
Through the interwebs, I have just
What, that's only $25 measly Billion bucks, only about 5X what a southern US border barrier would have cost, at US Feral Gov't prices. OK, but it's less than the latest installment of Save
This started off differently from how I would have thought. The President and his employees at the DOE can just pick schools and cancel the debt of students who went there. No suing of the schools is necessary, nor thinking twice next time a student sees something that seems worthless or too good to be true. It's a win/win, isn't it?
On Wednesday, the Department of Education announced it will discharge the outstanding federal student loans of former Corinthian Colleges students after the school faced multiple investigations and was accused of defrauding students out of millions in federally backed loans. In total, $5.8 billion in loans will be canceled for 560,000 borrowers, making it the largest single-loan discharged by the Education Department.Whoa, one of them could have been MY hairdresser! Well, that could explain a lot ...
This is the second group discharge of student loans by the Biden administration. The first was in April when loan discharges for former students of Marinello Schools of Beauty were approved.
Oh, and, an intermediate headline notes:
Biden faces pressure to help Black borrowers with heavy student debtI believe Biden's advisors screwed up on that one. These black borrowers would have voted for him anyway. It's just "whom they are."
The Unz Review commenter who pointed me to this article noted that this was likely just the beginning. Yep.
The White House has indicated that it is nearing a decision on broad student loan debt forgiveness, zeroing in on canceling $10,000 per borrower, but has not said that a decision is finalized. President Biden has already confirmed he “is not considering $50,000 debt reduction.”That's 11.8 million votes, at least if you wait until after coming November 1st! That keeps the suspense up, you know. Voters like that.
The Federal Reserve’s analysis found forgiving $10,000 per borrower would result in roughly 11.8 million borrowers – slightly more than 31% – having their entire balance eliminated. If the Biden administration were to move forward under this plan, an estimated $321 billion in federal student loans would be forgiven.
Then, we learn of the true Communism:
How much student loan forgiveness you receive could be dependent on how much you make. Sources tell The Washington Post that relief could be limited to those who make less than $125,000 or $150,000 per individual tax filers or $250,000 or $300,000 for couples who file together.Oh, there you go. Let me explain all these "moral hazards'. (It's a term that I learned from some of the Libertarian pundits.)
The problem with student loan forgiveness is not just about the money. After all, even the $321 Billion they are working toward, for now, is a month's worth of Feral Gov't spending in a normal (non-Wartime, non-PanicFest) year. We* can spare that to make all of these kids "whole" again, can't we, or at least get them out of the big holes they have dug for themselves? Definitely, another aspect of this loan forgiveness is that it's a ploy to get many votes out of the young recently college "educated" Americans. It's not a coincidence that the Bai Dien administration is
Here's the real destruction:
1) The risk to an insurance company that the holder of a policy will destroy the insured property in order to collect the monetary reimbursement available under the policy. No, no, no, this isn't about insurance companies. Look at (2) and (3) though:
2) The risk that an individual or organization will behave recklessly or immorally when protected from the consequences.
3) The prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk.
There are really 3 pieces of moral hazard that have been pinched off and dropped onto American soil with this one, of different sizes. Let's just think first about how a young person who had scrimped a bit in college, worked as much as he could, and maybe not bought that large pick-up truck on payments and not partied as hardy during his 4 years at the U, to keep his loans under $10,000, might happen to feel upon reading this news.
How about a guy who did accumulate more of a loan than he could have but made up for it by finding one of the fewer decent jobs left, working hard after college, and shoving money into that loan to be rid of it for peace of mind? He was too upright of a person to blow the loans off. How about that guy who spent another couple of years in graduate school, listened to his Dad about the job market, got married to a hard-working yuppie gal, OK, hopefully a hot yuppie, and they have not only paid off half their loans in 3 years, but they are making a lot of money, at least per the IRS tax forms?
Besides all the taxpayers who really don't have the hours in a day to think of all the ways the Feral Gov't is screwing them over, all of these people are getting royally screwed over too. Their responsibility was not rewarded. Instead the Feral Gov't is now making them into suckers. The 1st guy, like many, was responsible and forward-thinking enough to not accumulate as much debt as the banks and the university would have been glad to lend him. The 2nd guy made a great effort to pay off the loan quickly, in order to get ahead in life. The 3rd guy got ahead in terms of earnings, so the Commie part got him. All of them are losing out to the irresponsible who have done none of this.
What are you supposed to think now? I know I'd decide soon enough that being responsible does not pay in this country. Next government project that comes along to "help" the American people? "I'll take advantage of all of it, and I'm not gonna sweat it." I know I'd be thinking like this. This sort of thing, being treated unfairly, really, really pisses people off.
Since the US Feral Government starting back-stopping these loans, the banks had nothing to lose, creating a moral hazard there. A a loan officer was no longer a reason to be responsible and keep risk of bad student loans down. For the universities, the moral hazard was that there was now nothing to lose by raising tuition. Students could all pay. The banks, as backed up by the taxpayers, would see to that.
Now, something I didn't see coming is that the DOE can just pick schools that they say are scams (they probably were), but there's no risk in creating a scam college anyway. The banks will loan the money to the students, and instead of getting sued by former students at any point, the US Gov't will just blow off those students' loans, so everyone's happy. (Yeah, you have to shut down, but you keep your money, so I'd call that a successful scam.)
Moar Moral Hazards all around! It's the way modern America operates. Does anyone still expect to have an upstanding and responsible population in a few more years? Why? How?
* I don't really mean "we", Kemosabe, as that's not me. I'm not gonna be the holding much money in US Dollars when the music's over.