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Will there be a debt jubilee?
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Kid Twist Offline
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Post: #1
Will there be a debt jubilee?
I've heard it a few times recently, if the discussion gets lively I'll talk about from whom, but do you think this might happen? Or is it too big of a moral hazard?

If I paid off all my student loans, do I get a rebate on what I previously paid? Do you extend this to credit cards too?

It's always interesting to think about.
01-18-2020 05:10 PM
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rpg Offline
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RE: Will there be a debt jubilee?
Never going to happen. Debt is the misery of the working man.
01-18-2020 05:17 PM
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Emperor Constantine Offline
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RE: Will there be a debt jubilee?
> 2020
> God smiles on the US.
> The government forgives everyone's student loan debt.
> There's a twist.
> Big Brother don't pay the universities. The debt just goes away.
> The university system topples as they all go bankrupt.
> Big Brother gives them no funding and hands out no student loans.
> New universities open selling affordable, economically valuable degrees since taxpayer money no longer funds their overpriced SJW stupidity.

One can only dream.
01-18-2020 06:12 PM
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Days of Broken Arrows Offline
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Post: #4
RE: Will there be a debt jubilee?
If student loan debt is relieved, that means it will ultimately be re-paid by taxpayers.

Which means a large portion of that would be the working class paying for the schooling of the upper class. Which is beyond the pale.

Politicians need to point this out. The long-gone labor union leftists from the '60s would have.

https://www.youtube.com/watch?v=8Bb-RnRjYBk

01-18-2020 07:14 PM
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Garuda Offline
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Post: #5
RE: Will there be a debt jubilee?
It's already happened for one lawyer. He somehow got the judge to accept that he met the three criteria of the "Brunner test."

https://www.nbcnewyork.com/news/local/la...s/2257792/

Quote:NY Bankruptcy Judge’s Ruling Could Help People Get Rid of Student Loans

The ruling hinges on an obscure test in bankruptcy law connected to a debtor's ability to pay
Published January 10, 2020

A lawyer managed to get own his massive, years-old student debt thrown out in New York bankruptcy court this week, after he was able to prove the burden was so huge he could never afford to pay it.

The ruling potentially has huge implications for others suffering under crushing student debt loads, as it condemns the common belief that such debt can't be discharged in bankruptcy.

Kevin Rosenberg took out student loans from 1993 to 1996 to pay for college, spent five years in the Navy, then took out more loans to attend law school from 2001 to 2004.

By the time he was done, he owed more than $116,000 -- but over the years, that ballooned to more than $221,000 as of last November, according to court papers.

In his bankruptcy filing, Rosenberg said that he was earning so little, and owed so much, that he was left with negative income of $1,500 a month.

Cecilia Morris, the chief U.S. bankruptcy judge in Manhattan, wrote in a 12-page opinion that Rosenberg had satisfied what is known as the "Brunner test," a three-pronged standard for dismissing student loans in bankruptcy.

(The prongs are: inability to maintain a "minimal" standard of living due to loan payments; the likelihood that it will stay that way for much of the loan period; and evidence that the debtor made a good-faith effort to repay the loan.)

Morris, in a scathing commentary, said courts had been incorrectly interpreting that test for decades in such a way that it had become almost impossible to use a bankruptcy filing to get out from under student loan debt.

"This Court will not participate in perpetuating these myths," Morris wrote.

The NY State Higher Education Services Corp, the defendant in the case, referred questions on the ruling to Educational Credit Management Corp., which holds Rosenberg's loan.

"We are reviewing the ruling to determine how we will proceed," an ECMC representative said.

The company, in an Oct. 2019 brief, argued that Rosenberg did not meet any of the prongs of the Brunner test -- in part, they said, because he had chosen not to earn a living as an attorney and take advantage of the education he borrowed to fund.
01-18-2020 09:53 PM
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Athanasius Offline
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Post: #6
RE: Will there be a debt jubilee?
I don't think there will be a willing debt jubilee because the sponsors don't want it. However, if things get serious there could be a de facto one by way of mass inflation. This will benefit those in debt at the expense of creditors and savers (e.g. bondholders, those with cash holdings, etc).
01-18-2020 10:36 PM
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pitbullowner Offline
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RE: Will there be a debt jubilee?
(01-18-2020 06:12 PM)Emperor Constantine Wrote:  > 2020
> God smiles on the US.
> The government forgives everyone's student loan debt.
> There's a twist.
> Big Brother don't pay the universities. The debt just goes away.
> The university system topples as they all go bankrupt.
> Big Brother gives them no funding and hands out no student loans.
> New universities open selling affordable, economically valuable degrees since taxpayer money no longer funds their overpriced SJW stupidity.

One can only dream.

That's a dream i would be super grateful for

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01-18-2020 11:54 PM
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Spectrumwalker Offline
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Post: #8
RE: Will there be a debt jubilee?
(01-18-2020 07:14 PM)Days of Broken Arrows Wrote:  https://www.youtube.com/watch?v=8Bb-RnRjYBk


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01-18-2020 11:57 PM
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911 Offline
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Post: #9
RE: Will there be a debt jubilee?
Bernie might write off student debt, otherwise it's not going to happen.

This is what SHOULD be done with the student debt problem:

1- Enforce strict tuition cost controls on universities: limit of $7,500/yr for public universities in-state, $10,000-$12,000/yr for out of state students and for private colleges. The college system is incredibly bloated and there is no reason for the astronomical tuition hikes in the last 2-3 decades, especially with tech and productivity in place to reduce costs.

2- Set up a national junior/community college system with very low tuition ($1,000-$2,500/yr) that would allow students to complete their first two years of college and get an Associate degree, they can then transfer to a 4yr college to get their bachelors. Similar to what's in place in California now.

3- Eliminate all interest paid on student loans, retroactively. All past interest payments should be applied to the principal due instead. No interest will be due on that debt going forward.

4- Eliminate 50% of all student debt owed over $50k, and 25% of debt under %50k. So for instance an $80k debt will be reduced to $52,500, and from this amount you would also take out all interest paid to date on that debt.

5- Allow a repayment schedule of 10% of annual income earned, or 10% of amount owed, whichever is lower.

λ ό γ ο ς
(This post was last modified: 01-19-2020 01:11 AM by 911.)
01-19-2020 01:09 AM
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Kid Twist Offline
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Post: #10
RE: Will there be a debt jubilee?
What about the moral hazard of those who have already paid off their loans? Would it be a recency thing (you paid these loans off during the crazy, inflated university experience period of the last 20 years?)? Would you allow them to claim a credit for having paid? A write off?

I always said to just allow everyone to write it all off vs income. I think most would be happy with that; then the government can decide if they wanna stiff the universities. They should, since they gave them so much free money for so many years --- and the big boys have endowments of billions at this point.

Get your passport ready!
01-20-2020 12:10 PM
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Hypno Offline
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RE: Will there be a debt jubilee?
There would be no stuffing of the universities, they already got paid. The loans are owed to the government.

I don’t think it’s going to happen but the fact that the government owns the loans means it could be done if congress voted to do so.

On the moral hazard question, ask Bernie if this is a one time thing? Politicians are throwing around figures which estimate the cost of student loan forgiveness but in terms of fairness why should this only apply looking backwards? To be fair, the moment they do this it means college is free going forward because people about to attend college will ask for the same deal
01-20-2020 02:08 PM
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Enoch Offline
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RE: Will there be a debt jubilee?
If student debt is forgiven universities will just raise tuition on the next batch of students.

Whatever you subsidize you get more of.

That said if Bernie or Pocahontas win I do expect a student loan jubilee. Savers and workers such as myself who never owed on student loans will get nothing.
01-20-2020 02:15 PM
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Salinger Offline
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Post: #13
RE: Will there be a debt jubilee?
Should student loan debt still be forgiven if 21% of college students are buying Bitcoins with it?



01-20-2020 03:13 PM
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Kid Twist Offline
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RE: Will there be a debt jubilee?
^Even bothering to say that it's "illegal" or immoral or whatever is just a stupid side note as to the total immorality and possible illegality of giving loans in the first place, not allowing to be discharged. Complaining about what people are doing with loans (staying in swanky apartments, etc) is just a symptom of the first disease.

Get your passport ready!
01-20-2020 05:20 PM
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Kid Twist Offline
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RE: Will there be a debt jubilee?
(01-20-2020 02:08 PM)Hypno Wrote:  There would be no stuffing of the universities, they already got paid. The loans are owed to the government.

I don’t think it’s going to happen but the fact that the government owns the loans means it could be done if congress voted to do so.

On the moral hazard question, ask Bernie if this is a one time thing? Politicians are throwing around figures which estimate the cost of student loan forgiveness but in terms of fairness why should this only apply looking backwards? To be fair, the moment they do this it means college is free going forward because people about to attend college will ask for the same deal

Yes, sorry I didn't make that clear. I believe they have leverage in making universities adapt to new realities, even outside of legislation (like taxing them, as they should, for all the freebies they got by "accident" which is just negligence of the taxpayer), however.

All in all, it seems like very little will change. The question is how long and strong the USD stays.

Get your passport ready!
01-20-2020 05:22 PM
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