Sen. Josh Hawley To Introduce Legislation Putting Universities On The Hook For Student Debt

Hawkeyenuts66

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It is time for amending the US Code to allow for bankruptcy of student loans. However, the idea that schools should be on the hook would have disasterous consequences. 18 schools have an endowment over 10 billion dollars. All 18 of those schools don't need tuition, or could easily say free tuition for households under $250K annually and the rest must pay out of pocket with no student loans. There are roughly 120 universities with endowments between 1 billion and 10 billion that could handle this, but would likely take some sort of action. So that's 138 universities. Every other school would either have to increase tuition to an extent they self insure themselves, or would likely not survive having to repay some of this debt. That's like basically every medium sized liberal arts school, secondary state school, community college, etc... It totally would create a caste system where the very best students went to the very best colleges (they becoming even more competitive) and nothing for the rest.
The only way to make SL debt dischargeable is to force the student to surrender their degree and be banned from using it to secure employment. Yes they would still have the "education" but they can't claim to have a degree in anything. They have to have some skin in the game instead of taking a small hit to their credit rating and moving on from 6 figures of unsecured debt.
 
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luvmyhawks

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Agree 100% with that. More disclosure requirements would be great.

Maybe I misunderstood what he was getting at by saying universities should provide a “proper education.”

Which is precisely why Hawley's proposal should be a starting point, not an end point. If we are serious about some sort of college education reform and not just some gimmick to buy votes, then this would appear to be a good starting point. A lot would need to be cleaned up with it.

0% interest, accountability for the institutions, bankruptcy? Sure, but you forgo your 4 year degree, Can't borrow more than the community college rates or even state university rates? Great. I am not real sure all the answers myself, but lets get some real discussion going about it.
 
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IACub

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To get a federal student loan I don’t think there is any credit score requirements. I know a student who got a guaranteed student loan a month after bankruptcy.
Okay, but that would still be the lender's underwriting policy, and the government backing it would have to approve of their practices. So if a lender is giving out money with essentially no credit standards how is it the university's fault for helping people get those loans?
 

IACub

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Maybe by telling students they have high placement rates and income opportunities when graduating with a degree from their university when it is in fact, not true.
That has nothing to do with Federal student aid. If you want to tell people they don't need a college education, go right ahead, but that's a different subject. If you want to say higher education costs too much I won't argue with you. But the system as it stands is that college costs a lot of money and the government props up a corporation that sells student loans with virtually no underwriting. The colleges need students to pay for their education, so they send them to get these student loans. Tell me how the school is being financially irresponsible in this situation when it's the lender who's underwriting the loan. The school is simply acting as middle man in this case.
 

theiacowtipper

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Okay, but that would still be the lender's underwriting policy, and the government backing it would have to approve of their practices. So if a lender is giving out money with essentially no credit standards how is it the university's fault for helping people get those loans?
I agree completely. Hence my reluctance in holding universities accountable. Note that colleges and universities can already be removed from the program if default rates get too high
 

luvmyhawks

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That has nothing to do with Federal student aid. If you want to tell people they don't need a college education, go right ahead, but that's a different subject. If you want to say higher education costs too much I won't argue with you. But the system as it stands is that college costs a lot of money and the government props up a corporation that sells student loans with virtually no underwriting. The colleges need students to pay for their education, so they send them to get these student loans. Tell me how the school is being financially irresponsible in this situation when it's the lender who's underwriting the loan. The school is simply acting as middle man in this case.

I totally get what you are saying and I am not real sure what the correct answer is. Which I why I think this is a good starting point. Let's see how interested they really are at coming to some kind of solution. I think some of the accountability could be for some of those for profit colleges that are promising the world to new enrollees. However, for all universities, one way for more accountability is once a student decides on a degree, they have to meet with a counselor, just like I did when I was in college. One of those discussions is clearly laying out potential careers with salaries, placement rates, etc.... on said career decision.
 

IACub

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I totally get what you are saying and I am not real sure what the correct answer is. Which I why I think this is a good starting point. Let's see how interested they really are at coming to some kind of solution. I think some of the accountability could be for some of those for profit colleges that are promising the world to new enrollees. However, for all universities, one way for more accountability is once a student decides on a degree, they have to meet with a counselor, just like I did when I was in college. One of those discussions is clearly laying out potential careers with salaries, placement rates, etc.... on said career decision.
That's all fine and good, but I guarantee you Hawley isn't interested about "coming to some kind of solution." He's blowing a dog whistle because the liberal higher education system indoctrinating children is one of the talking points he was given.
 

luvmyhawks

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That's all fine and good, but I guarantee you Hawley isn't interested about "coming to some kind of solution." He's blowing a dog whistle because the liberal higher education system indoctrinating children is one of the talking points he was given.

Oh, that is quite possible. I am no fan of Hawley. WOuld just love to see some actual solutions out of Washington. If this is a starting point, great. More than likely we will hear nothing else about it, unfortunately.
 
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abby97

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I like Hawley's socialist plan. First step to free university education for all.
Free university education would be a monumental mistake. Two negative things would happen immediately, (1) the education accountability would be thrown out the window so anyone could graduate. In today's culture, no way would the left allow graduation rates that favored asian and white students to be higher than minority students. (2) Lazy losers would use free college to provide 4 years of partying and a payment to not work.

That is not a good idea.
 

theiacowtipper

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Free university education would be a monumental mistake. Two negative things would happen immediately, (1) the education accountability would be thrown out the window so anyone could graduate. In today's culture, no way would the left allow graduation rates that favored asian and white students to be higher than minority students. (2) Lazy losers would use free college to provide 4 years of partying and a payment to not work.

That is not a good idea.
Agree for the most part, even though it makes me I’ll. However, I feel much better about telling you that your bullet point to is classic Abby BS
 

sober_teacher

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Agree for the most part, even though it makes me I’ll. However, I feel much better about telling you that your bullet point to is classic Abby BS

Would anyone be in favor of offering a tax credit/tax break for people who attend trade schools or jucos for undergrad courses?
 

timinatoria

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Who defines proper education? People should be able to pursue whatever degrees they want to, and educational institutions should be able to provide those options.
Then they should be able to pay off all loans on their own without loan forgiveness.

We agree.
 

theiacowtipper

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Would anyone be in favor of offering a tax credit/tax break for people who attend trade schools or jucos for undergrad courses?
There already are those programs, although admittedly they are the same as 4 year tax breaks. I only speak of Iowa here, but the regents schools have a lot of power. They tend to push down funding for community colleges as every student who enrolls at a cheap cc is one less that May enroll at the university of iowa.
 

sober_teacher

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There already are those programs, although admittedly they are the same as 4 year tax breaks. I only speak of Iowa here, but the regents schools have a lot of power. They tend to push down funding for community colleges as every student who enrolls at a cheap cc is one less that May enroll at the university of iowa.
Sadly, that’s part of the problem isn’t it. Too much emphasis on the university system.
 

abby97

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Yeah, looking at discharging in bankruptcy, publishing outcomes and other metrics, sounds good.

But I don’t understand why it’s a university’s responsibility to ensure loan repayments.
Incentivizing them to keep tuition low. (paying staff realistic salaries, not building new buildings every year, not making dorms like luxury resorts, etc.)
 
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Incentivizing them to keep tuition low. (paying staff realistic salaries, not building new buildings every year, not making dorms like luxury resorts, etc.)
Then just reduce max loan amounts/guarantees if that’s the goal.

I think the luxury resort dorms is a boomer/grump urban myth by the way. There may be some but by and large most dorms are pretty average in our experience. My son’s dorm is 68 years old and doesn’t even have AC.
 

sober_teacher

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Incentivizing them to keep tuition low. (paying staff realistic salaries, not building new buildings every year, not making dorms like luxury resorts, etc.)
Would be nice if states upped funding levels as well. Feel free to have states exercise greater control on salaries/facilities - but to be fair, many buildings are built via alumni donations not public funds.
 

TornadoHawk93

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Doubtful on the religious affiliation backing it up. State tax payers already pay at least half the bill for Catholic, Lutheran, etc primary through secondary education. A strong chunk of schools simply can't survive on private tuition and church support.
Not saying your statement is totally incorrect...but I am involved with a Catholic Grade and Middle School and the taxpayers are not paying a dime for the kids that go to our school. So, where is your info coming from? Thanks.
 

TornadoHawk93

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There certainly is room for reform. I just don't think it should come from a goose stepping charlatan with Stanford and Yale on his resume. Nothing says elite like Stanford and Yale, and then telling people who took out loans that they should have been, oh, I don't know, born wealthier.
I don't give a CRAP where the reform comes from...just as long as it actually happens. I am assuming he (Hawley) paid his debt for those schools he attended......so no skin off my back as a taxpayer. If he gets this done then I will applaud him for doing it.
 

tumorboy

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Not saying your statement is totally incorrect...but I am involved with a Catholic Grade and Middle School and the taxpayers are not paying a dime for the kids that go to our school. So, where is your info coming from? Thanks.
Varies from state to state. In states with large voucher programs. We certainly pay near half the costs. It comes in our Milwaukee County property tax bill every year. Private school populations were in steep decline before voucher programs. Several religious affiliation schools every year lobby for more and more voucher money. They say it's inadequate. And will need to close doors or allow fewer kids.
 

TornadoHawk93

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Varies from state to state. In states with large voucher programs. We certainly pay near half the costs. It comes in our Milwaukee County property tax bill every year. Private school populations were in steep decline before voucher programs. Several religious affiliation schools every year lobby for more and more voucher money. They say it's inadequate. And will need to close doors or allow fewer kids.
Ahhh...gotcha. I am not on board with the voucher program. I have said before that if I and my wife make the decision to send our child to a private Catholic school (as we did), I don't think anyone else (via their taxes) should be on the hook for that cost but us. It simply is not fair and should not happen.
 
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tumorboy

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Ahhh...gotcha. I am not on board with the voucher program. I have said before that if I and my wife make the decision to send our child to a private Catholic school (as we did), I don't think anyone else (via their taxes) should be on the hook for that cost but us. It simply is not fair and should not happen.
Well they got their foot in the door by claiming it was only going to help disadvantaged kids trapped in poverty to go to better schools. But over the past 30 years they've raised who is eligible numerous times.
The fallout has been test scores by the targeted students haven't improved vs public population of same students. The rate tuition for private schools has increased rapidly And now the majority of new voucher enrolled were already going to private schools. It's almost as if it's trending towards universal vouchers.
 

thewop

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Way to take a reasonable idea and making it part of a broader solution to the student debt problem and politicize it to the point that it will be radioactive by the time anyone gets around to actually dealing with the issue. This, right here, is the exact bullshit that makes Republicans completely incapable of governing anymore. Everything has to be a dig, everything has to be a stab that causes pain to someone. Making Universities take ownership of the debt they cause is a very good way to make them better at managing costs. Of course, the issue for why they did that needs to be addressed as well, which is decreased funding for universities (guess which party is primarily responsible for that!).

But, now that Josh Hawley is using it to own the libs, I guess nothing will get done.
This. It could be a good bill without throwing pregnant men into the first 2 lines of the intro...

University accountability is needed, so hopefully this at least send the discussion in the right direction, but take the politics out of it for once (I know that's asking too much).