Betsy DeVos Announces Plan to Protect Taxpayers From Student Loan Costs
“a tiered relief system that will provide aid to defrauded borrowers”
It’s good to hear someone in government talking about this. The debt is massive and keeps growing.
The Daily Caller reports:
DeVos Announces Rules Protecting Taxpayers From ‘Massive’ Student Loan Costs
Education Secretary Betsy DeVos announced rules protecting taxpayers from “massive” student loan costs Wednesday.
The Department of Education (DOE) unveiled a tiered relief system that will provide aid to defrauded borrowers in an amount commensurate with their earnings, reported The Hill.
“No fraud is acceptable, and students deserve relief if the school they attended acted dishonestly,” DeVos said in a statement. “This improved process will allow claims to be adjudicated quickly and harmed students to be treated fairly. It also protects taxpayers from being forced to shoulder massive costs that may be unjustified.”
Whereas former President Barack Obama’s policy provided full relief for defrauded students, DeVos’s policy shifts burden off of the taxpayers by implementing a tiered system for loan forgiveness.
Under the new system, if more than half of the graduates from a defrauded borrower’s college earn more than the borrower, the borrower receives full relief for his loans. If half of the graduates from a defrauded borrower’s college earn more than the borrower, the borrower receives 50 percent relief for his loans. If the defrauded borrower earns more than 60 to 69 percent of his fellow graduates, he receives 40 percent relief for his loans, and so on.
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Comments
Hmmm. It seems like a lot of benefit can come from … not seeking employment.
if more than half of the graduates from a defrauded borrower’s college earn more than the borrower, the borrower receives full relief for his loans.
Make nothing … and magically owe nothing. A hell of a deal, but not for the taxpayers.
If you’re able to earn a lot more than your loan repayments then why would you forgo the income just to get off making the payments? It makes no sense. What possible benefit would you be getting from that? But if you’re not able to make much more than the loan repayments then why should you pay? What benefit did you get from those loans?
You’d do it because you only have to impoverish yourself long enough to qualify for relief. After it’s granted and finalized you can take that supposedly high-paying job free of debt. That’s an open invitation to game the system.
So to avoid that incentive the taxpayer should just pay all these students 100% of their loss and be done with it?
No, the government should go after them for what they owe. This isn’t just about recovering debt, it’s about the cost of education. Colleges have zero incentive to hold the line on increasing tuition costs so long as loans exist and students can avoid paying some or all of the debt they incur (for what are in many cases crap degrees with little economic value). That’s why college education has skyrocketed in price, all of the value created by government making university “affordable” accrues to the university, not the student, in the form of tuition and lodging increases.
So you’re saying none of them should get any compensation for the fraud? The last admin wanted to give them all 100% compensation. De Vos is saying no, some of them got some benefit, so we’re going to save the taxpayer some money by only giving them partial compensation. You say oh, but that will create bad incentives, so screw them, don’t compensate them at all?! How does that make sense?
I’m sorry, but this is crazy, not to mention impractical. Is the federal government going to require that all graduates send copies of their 1040 form to the Dept. of Education?
Those that want compensation, yes. Since the minimum compensation is 50%, even the richest of the class will surely comply.
If these take out a loan, be it for a new car or an education, they should pay off the obligation. A degree in Queer life in the White World does the taxpayers no good, so why should we pay for it.
How about just ceasing any form of federal student loans?
It is just a new wrinkle in an old game: spending other people’s money.
Knowing that the G loans money for schooling, the schools raise tuition well above what the true value of the education is actually worth and the students pay it because the G is providing the money, or at least guaranteeing it. The tuition always goes up because the loans will cover it. Its the old chicken-egg scenario.
Make loaning money for college a private affair twixt the student and the bank (or whoever). If the student will not evaluate the learning as to value in the economic world, the banker sure will if repayment is in the cards. You would find loans going to aspiring Electrical Engineers and Chemists, even welders and pipe-fitters and not to gender studies or that holy grail of a masters in “Queer life in the White World”.
How are any of these comments about the advisability of student loans at all relevant to a story about a specific group of students being compensated for fraud?
Considering that a great majority of your comments have little to do with the OP, I find this puzzling. Or is this one of your fun games where you point your finger at everyone else and blissfully ignore your own vitriol? That’s a fun game! I love it when you get done calling people liars and stupid and crackpots and then post a plea to LI editors to better moderate hateful comments and name-calling. It’s SO cute that you don’t get that if we did initiate such a policy, you’d be among the first ten banned. Happily, we don’t follow your suggestions on banning, so you don’t have to worry about your own proposed rule biting you in the butt.
Every single one of my comments, on any thread, directly follows from what it replies to, except when I explicitly mark it OT. Top level comments always refer to the post, except when they explicitly cite earlier comments, and are positioned at the top level because the tree has gone too many levels down. Replies to comments always refer to that comment. So I don’t know what you’re talking about.
Nor do I engage in “hateful comments and name-calling”. Calling someone out on a lie when they have just told one is not disruptive, it’s the exact opposite, correcting disruption. I challenge you to find one instance of my calling out someone for lying without showing exactly how they have blatantly lied. Ditto when someone writes something that is not subject to serious debate but clearly and indisputably a crackpot theory, on the level of “George Bush was behind the Reagan shooting”, calling them on it is not abuse.
Now explain how any of these comments about student loans in general are relevant when the topic is compensation for fraud.
Judging by these comments, I think there’s a lack of clarity in the way this is written here and the excerpt chosen. My understanding is that the policy discussed does not mean that ANY borrowers will be eligible under this program for loan forgiveness.
This is about compensation for students who went to specific colleges that have actually defrauded these students (such as Corinthian colleges). You can’t qualify for this program if you go to a typical college then decide to be a bum or major in a dead end major just because you make less than the real majors or normal, working class graduates. Making less than others at your normal college won’t mean any subsidized loan forgiveness at all under this specific plan.
Basically, some people will always do well even at these hotbeds of academic fraud. These people won’t get as much relief because they weren’t harmed as greatly as those that can’t overcome the fraud. Some of it will have to do with timing too as the latest grads will be most affected by a finding of fraud.
Finally someone bothers to read the post before commenting.