Here comes another hit to working and middle-class young people

Went kayaking yesterday on a wetlands river - photo is up top. Going outside (and staying there!) is keeping me sane amid what Betty Cracker at Balloon Juice calls “The Horrors”. I have no idea what I’m going to do when it’s 10 below zero.

On to The Horrors:

Wait until the wage garnishments start in 6 months. Hoo boy. A lot of pain ahead for our already struggling young people.

I know a lot about consumer debt because my former clients were all working and middle class and had tons of it, including student loan debt.

Student loan debt is an odd outlier in the world of debt because it is “unsecured” - there is no asset that secures the debt like your car secures your car loan or your house secures your mortgage - but unlike all other unsecured debt (besides taxes and child support) it can’t be discharged in bankruptcy. This is partly (although not wholly) due to Congress, including Democrats in Congress, pushing thru a bankruptcy bill in 2005 that was an absolute gift bag for lenders.

The student loan debt conundrum is complex - it’s partly due to shrinking state subsidies for higher ed, meaning today’s young people have to borrow a lot more than I did - I borrowed only 1500 for all of undergrad and I took a long route to get there - I did a two year technical degree at a community college and then a bachelors - 1500 TOTAL. - amazing right? That was back when we supported public education.

It’s also partly due to colleges and universities using students like pack mules and loading them up with lifetime debt by encouraging them to borrow ridiculous amounts. An easy rule of thumb for how much a student can easily pay back is borrow only what one year of pay from your major is likely to pay. So a person pursuing an education degree should only borrow about 40k, because 40k is one year salary for a first-year teacher. Super expensive degrees - graduate degrees in science or medicine are exempted from this rule and need special analysis.

Although student loan debt can’t be discharged in bankruptcy it absolutely CONTRIBUTES to bankruptcy filings because consumer debt is about a total debt picture. The debtor might not have defaulted on their credit card debt or mortgage if they hadn’t have had 100k in nondischargeable student loan debt that had to be paid.

I am 100% sympathetic to young people who are buried in this debt. I would like their country to help them. I think they got screwed in a way my generation did not get screwed. However - and I say this as a proud Lefty- the Left’s solution to debt forgiveness under Biden was dumb and maybe more importantly - people hated it. They hated it because it was inequitable - unfair. It wasn’t even equitable as between groups of debtors. Why should the class of 2010 have their debt forgiven while the class of 2019 did not? It was essentially like we picked a random group of people, forgave just their debt, and then all celebrated a huge win for the Left. The policy was just incoherent garbage, and it came out of the Left side of the Party. We can do better. We need a comprehensive plan to reduce student debt that includes colleges and universities - they can’t demand tuition increases every fucking year and they can’t trick unsophisticated (many times first generation college students) into signing their life away to keep the money coming in.