No this is not a parody account

This wins woke internet today.

I don't mind them cancelling student debt, especially because I have a lot of it that needs cancelling. When compared to the $700 billion in PPP loans they gave out to mostly rich business owners and then forgave, this is pocket change.

The issue I have with it is that it's a purely cosmetic gesture. Once payments start back up, that $10K per person will be recouped over the next couple of years in interest. This was a gift to the lenders, who pushed Biden for specifically $10K in relief, because they knew it wouldn't hurt them at all. They just wanted payments to start back up ASAP.

The bigger issue with this is that it doesn't address the actual problem, which is rising tuition costs that are insanely, unjustifiably high. The entire tuition-and-federal-loan industry is a money transfer scam exacerbated by exponentially growing university administration payrolls.

For example, University of Michigan has 48,000 students. For a student body that size, they have roughly 6800 academic faculty but also nearly 19,000 admnistrative staff. Their administrative staff is larger than the student population of most US universities.

Contrast that with University of Toronto in Ontario, Canada, which has around 64,000 students. Even though they're teaching roughly 16,000 more students than UM, they somehow are able to do it with only 3200 faculty (about 3600 FEWER than UM) and only 7,400 administrative staff (around 12,000 FEWER than UM).

The US university model is all kinds of fucked up and it seems to be designed this way to support a system that is indistinguishable from a price-gouging, money-laundering racket.

My point was that the stupid retorts like "if you take out a loan, you should pay for it" that have been flying around (mostly from conservatives) about student loans are hypocritical, at best, given that the government forgives huge loans/debts all the time (including debts much bigger than what was just announced). Forgiving these loans will have zero affect on the average taxpayer just like forgiving the PPP loans had pretty much zero effect on the average tax payer (in terms of tax rates).


This will likely have no effect on inflation. Repayments have been paused for the better part of the past two years so any effect that repayments would have on inflation is already baked in to current inflation rates.

However, I do agree that it could lead universities to raise tuition yet again (that's the crux of the scam I talked about earlier) but they already do that anyway.


Sorry, I meant loan servicers not lenders. It's true that the fedgov is technically the lender but fedgov doesn't service the loans itself in any meaningful way. Those duties were shifted to quasi-governmental "loan servicers" like MOHELA over a decade ago (and nearly all student loan balances were also shifted to these loan servicers too). There are also private financial companies like SoFi that participate in student loan servicing and refinancing.

All of these loan servicers profit off of student loan payments via interest rates (duh). However, even private companies like SoFi cannot collect payments from student loan borrowers during fedgov's moratorium on payments, so they take a profit loss the longer the moratorium stays in effect.

And, as I said, these loan servicers pressured Biden into cutting this deal, so that the repayments could start back up ASAP and they could start making money again: www.foxbusiness.com/personal-finance/sofi-ceo-biden-cancel-student-debt-restart-payments

Yeah, but you can find just as many people (even economists) saying that it won't meaningfully increase inflation.

Furman's just one guy and his (and others') "Chicken Little" doomsday proclamations of inflationary impact are 100% hypothetical. Those dubious assertions rest on a laundry list of bullshit assumptions of how people "might" spend the "extra" money that these economists claim people will have based on this small amount of debt relief. I remember when health experts like Fauci made a bunch of bullshit assumptions about how people "might" behave during the pandemic, and look how that turned out.

The idea that this small amount of debt relief will lead to significant and immediate increases in consumer spending (which is the only way it would affect inflation) are questionable, at best, and farcical, at worst.

www.vox.com/2022/8/25/23320825/student-loan-debt-forgiveness-inflation

I somewhat get why some people are uneasy about it based on some sort of moral or economic principles (though I disagree with them), but this action will likely have zero impact on their lives at all. So why do they care other than "government do something bad in very abstract sense...me get big mad...so me go rage on Twitter!!! Grr!!!." The day-to-day lives and finances of the people most butt hurt about it will change the same amount of "not at all" as they did when the Bush government wasted trillions fighting wars in the Middle East.

Regardless, I have almost $80,000 in student loans and barely make half of that a year, so the people who have their panties in the tightest of twists about Biden's action on student loans can go eat big fat dicks as far as I'm concerned. I'll take the relief and they can learn to cope.