Hell Has Frozen Over!

by Dick Hall-Sizemore

I just can’t help myself — the Washington Post editorial page and Bacon’s Rebellion conservative contributors and commenters (that is to say, the bulk of the blog) are in agreement on an issue!

In an editorial in today’s issue, the Post opposes the wholesale forgiveness of student loans. Now the two groups disagree on the reasons for their opposition. Folks on BR fulminate that it would be unfair to those people who have worked and paid off their loans and also that it would send the wrong message about having to be responsible about borrowing. (I happen to agree with both arguments.) The Post’s main objection is that it would be the opposite of progressive policy; it would, in fact, benefit high income folks the most. (To be fair, some BR commenters made this same point, as well.)

The Post’s recommendation:  making sure that everyone who qualifies enrolls in an existing plan that links debt repayment to a borrower’s income.

Gotta love it when two opposites come to the same conclusion, even if by different routes.

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65 responses to “Hell Has Frozen Over!”

  1. Object-level conclusion: student loan forgiveness as formulated today is a bad idea.

    Policy-level conclusion: loan forgiveness is a great idea if we can couple it with the dissolution of the monasteries. Approach it from a consumer-protection angle — “start a conversation” about the deceptive claims universities make, where forgiveness is paired with the loss of government funding for any department/major that can’t demonstrate a ~15-year track record of placing students in jobs with an average ROI on tuition of +-20%. Loans on the books are forgiven if and only if the school that took the loan money dissolves the degree-issuing department.

    This aligns your incentives — now, you reach out directly to students and get them to bombard their alma maters with requests to dissolve departments. Schools then face a dilemma — dissolve the history department (I say this as a history undergrad) and relieve thousands of their loan obligations, or else the grads now hate them.

    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      I did not realize that colleges and universities placed students in jobs.

      1. They don’t, but they certainly market themselves as a path toward better career/life outcomes. If the net outcome is so bad that class-wide debt relief is being seriously debated, then yeah, the consumer-protection angle has legitimate merit. The problem here is systemic, and the fix must be as well. A one-off debt forgiveness scheme might as well be putting a band-aid on a zombie.

        1. They can lead to a better career and life….
          But you have to take real courses in areas that are in demand.. and you have to work hard and apply yourself… drinking, fraternity life, partying, smoking pot, fornication etc. are stupid and won’t help…
          And you have to be ready for college,,, if you’re taking remedial courses you’re weren’t ready…
          If you’re a minority and were admitted to meet a quota, you’ve been used by liberals…

          1. Reed Fawell 3rd Avatar
            Reed Fawell 3rd

            Exactly Right. Thanks.

      2. Nancy_Naive Avatar

        Well, they do have “Placement Offices”.

        FYI, W&M’s placement services are available to all graduates and alumni. I had a friend, who after 16 years with a major computer manufacturer, used the placement office to write his resume and send it to employers. He did locate his next job with the school’s help.


        We REALLY are family for life, albeit you may cringe when I say it.

      3. djrippert Avatar

        Only if they are for-profit colleges and universities in the minds of the liberal elite. In that case, they promised employment … even if they didn’t.

  2. Everything gov subsidizes becomes over priced.

    1. djrippert Avatar

      Of course. Once government steps in the rent seekers and crony capitalists are never far behind. Have you ever wondered why many of the super-rich support the American left’s lurching toward socialism? It means bigger government, more government subsidies, more chances for rent seeking, more opportunities for crony capitalists. The super-rich know they will get super-richer.

      Two examples:

      1. Fidel Castro died with a net worth of $900m.
      2. Terry McAuliffe asked people to suspend their disbelief as he became the Chairman of a start-up automotive manufacturer. The absurdity of that move is almost beyond description. Who would invest in such a venture? Oh, foreign nationals who needed to make an investment in order to get visas and the desperate State of Mississippi. End result – complete failure. Never got off the ground. Money gone. How much did Terry McAuliffe and Tony Rodham lose of their personal fortunes on that ill-conceived venture? Unknown. My guess – they made money. Will be a good question if Terry runs for governor again.

      1. “Fidel Castro died with a net worth of $900m.”

        Wow! I had no idea Cubans were so wealthy.

        What? You mean not EVERY Cuban is worth $900 Million? How can that be? Did Fidel Castro not practice what he preached? Did he not really believe in Marxism/socialism?

        Shocking. Truly shocking. I had always heard he was an honest and honorable man…

        /s – [just in case]

        1. Nancy_Naive Avatar

          Yeah, but he owed $400m to unnamed creditors.

          1. Would have been able to pay these unnamed creditors in Rubles?

          2. TooManyTaxes Avatar

            No, they were due in Venezuelan Bolívars!

          3. Nancy_Naive Avatar

            Same Bolivars that Obama used to buy votes against Trump from Chavez?

  3. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Here is angle today that got my attention today, as raised on front page of Wall Street Journal, one that tracked the same problem I highlighted in an earlier comment I reprinted a few days ago from my Nov. 20, 2012 post on BR titled Inquisitor, Investigate Thyself.

    The WSJ article started this way:

    College-Loan Debt Hits Parents Hard


    Poor and middle-income parents at hundreds of colleges have taken on substantial debt—amounts sometimes more than twice their annual income—to help their children through school, new federal figures show.

    The schools with the largest parent-debt burdens aren’t world-famous Ivy League schools, a Wall Street Journal analysis found. Rather, they include art schools, historically Black colleges, and small private colleges where parents are borrowing nearly six-figure amounts to fulfill their children’s college dreams. …”

    These are the sorts of loans I would focus on for some kind of relief, including loans incurred by parents on behalf of disadvantaged students who never graduated. Are not these folks hurt the most, and more likely unfairly so? My original post and its reprint has gotten of attention over past few days.

    1. Sorry, but I can’t support subsidizing bad decisions.

      If you want something to shrink, tax it.

      If you want something to grow, subsidize it.

  4. I’m trying to remember the country (Australia? England?) but they have started to where they’re only paying for STEM-H like degrees. That might be the ticket: if you want to go into a field where the jobs are not, up to you. If we need the jobs, we’ll subsidize you.

  5. LarrytheG Avatar

    Not enough skin in the game the way it is now and too many see it as “free money” and if they fail, no harm, no foul.

    But the loan provders will come after you AND they WILL mess up your credit score pretty good. The problem is younger folks don’t really appreciate the consequences especially if they come from a family that never had secure finances to start with.

    1. TooManyTaxes Avatar

      Or from families that never let their kids make any mistakes. And even if parents work with to help their kids recover, they can do it in a way where the kids learn lessons.

  6. Meant in reply to Larry: Improving financial literacy/educating high schoolers about the dangers of loan delinquency can go a long way, but how do you address the current crop of arrearages from a policy perspective?

  7. LarrytheG Avatar

    Not in favor of carte-blanch loan forgiveness.

    There’s a certain amount of selling your soul to the company store.

  8. LarrytheG Avatar

    WSJ article:

    Which Schools Leave Parents With the Most College Loan Debt?
    Typical families at dozens of institutions are borrowing almost $100,000 to finance student education, new data show

    Poor and middle-income parents at hundreds of colleges have taken on substantial debt—amounts sometimes more than twice their annual income—to help their children through school, new federal figures show.

    The schools with the largest parent debt burdens aren’t world-famous Ivy League schools, a Wall Street Journal analysis of the data found. Rather, they include art schools, historically Black colleges and small private colleges where parents are borrowing nearly six-figure amounts to fulfill their children’s college dreams, the analysis found.

    For the first time, the U.S. Education Department, through its annual release of college financial data, provided information Wednesday on the level of debt parents took on through a federal college loan program called Parent Plus.”


  9. Peter Galuszka Avatar
    Peter Galuszka

    There’s a kind of hypocrisy at BR. We have tons of articles about overpaid and under performing college admin and profs. Then they dun students who gave trouble paying for it.

    1. sherlockj Avatar

      No-one is “dunning” students.

      Just saying that a contract is a contract, and borrowers’ retrospective remorse, absent lawbreaking by the lender (federal government) is interesting, but not dispositive.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Is a pattern of fraud by or misrepresentation by institutions inflicted on students and or parents involved a fair question? I suspect so.

      2. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        How about State high school testing services too?

    2. Steve Haner Avatar
      Steve Haner

      It is because of the ridiculous cost that Bacon and I and others scream about the fat-laden administrations. I spent four years of SCHEV beating my head against that wall. Simply forgiving the debt or having the government pay for more students puts no pressure on the greed and self-enrichment. There has been nothing but consistency here, Peter.

    3. TooManyTaxes Avatar

      The solution for over-priced higher education is not to subsidize it more. Rather, there should be a bipartisan effort to force inefficiencies into public view and then pressure for cost reductions.

      We’ve seen challenges against over-priced drugs, including pointing out the unfairness of making U.S. consumers, insurance companies and taxpayers fund all of the costs of research. Big Pharma, while not out of the game, is now defensive. Why are colleges and universities different?

    4. djrippert Avatar

      Sounds like the kind of thing Elizabeth Warren would be incensed over. A cabal of upper echelon elite on college campuses selling overpriced snake oil to unsuspecting young adults. The profits are used for things like an $18m renovation of the house where UVa’s president lives and collegiate golf teams. The rich and powerful preying on the weak.

      Where is Sen Warren with an investigation into this obvious level of consumer fraud?

      All you hear from her is a silence as deafening as one would find in deepest recesses of space itself.

  10. James Wyatt Whitehead V Avatar
    James Wyatt Whitehead V

    Ice skating in shorts. Can’t wait!

  11. Nancy_Naive Avatar

    One thing that could go a long way is to “clean up” the gift/tuition/loan 3rd party payer.

    Employers, family, friends, philanthropists, etc., etc., can stroke a check directly to a school for ANYONE’S tuition, and take a tax write off, or at the least, not be liable for gift taxes.

    On the other hand, once that tuition has melted into a student loan, fugettaboutit! All Hell breaks loose if you attempt to make a student loan payment for someone else without being either a cosigner or “authorized payer”, which after requiring signing over your first born, STILL leaves the payer open to tax liabilities.

    I’m guessing one of the reasons is that the lending institutions are somehow snagging the tuition tax deductions at the time of the loan. Well, wouldn’t surprise me that they are getting the interest, the bankruptcy proof guarantee, AND the tuition tax deduction.

    What a freaking mess.

    1. “All Hell breaks loose if you attempt to make a student loan payment for someone else without being either a cosigner or “authorized payer”… ”

      I did not know that. This should be changed.

      1. Nancy_Naive Avatar

        It’s probably because student loans cover more than just tuition. Once the lender provides “dirty money” with the tuition payment, then it becomes institionally impossible to identify the tuition dollars.

        If I pay your tuition directly to the school, there are those tax deductions, American Opportunity whatever, that I can take, whereas if I buy you food and housing, I am providing you with income for which you may have a tax liability. If I give you tuition money and you pay the school, then I have given you a gift for which I may have a tax liability.

        The IRS loves to take crayons to money. To them, money is every other color than green.

      2. Nancy_Naive Avatar

        If you really are fascinated by taxes, look up “income averaging”. It’s an archaic code. Basically, if you had a huge increase in salary during the year, you could have averaged your income from the past 3(?) years or so, and that was the money on which you paid taxes. There was one exception. If you were a “full time student” in any 3 months of the year, you couldn’t take the income deduction. Think about when most kids graduate.

        The greatest thing one of my profs did for me was tell me this so I took only 2 courses in the spring. I was a part timer. I saved $1000 easily.

        1. Once you go the tax averaging route are you required to do tax averaging to compute your taxes for a certain number of years?

          1. Nancy_Naive Avatar

            It doesn’t exist anymore. Maybe for fishers and farmers. There is a foward averaging to handle lump sum distributions from retirement plans, but the deduction I used is long gone.

            So don’t do it!

            It was a year-by-year. If your income this year was much, much more than last year, you could take it. In my case I went from $3K to $18K. The income I paid taxes on was like (3+3+3+18)/4 , or 7.

        2. TooManyTaxes Avatar

          Decades ago, I used income averaging twice when my company transferred me. The Company paid moving costs, etc., which were considered income. Income averaging reduced my income taxes some and helped me a lot when I wasn’t making too much money as a young lawyer. As I recall, the taxpayer averaged income over three years.

          1. Nancy_Naive Avatar

            I love taxes. Well, no, I don’t. But I am constantly amazed at how, as complicated as they are, the tax codes dovetail so beautifully from one place in the code to another. Sometimes there’s a little slop but it’s all so wonderfully logical.

            Within my limited experiences, I have only found one place where even the IRS hasn’t figured it out. It’s in trust law on handling capital gains. Apparently, the IRS made a nebulous statement 20 years ago, and have not clarified it.

            If I hadn’t gone with math, I would have gone tax law.

            Even the much hated by some Obamacare just stitched in so nicely with the medical deductions on Sched A.

        3. djrippert Avatar

          Sounds like a winner for newly minted NFL players.

          1. Nancy_Naive Avatar

            They’re probably responsible for killing it.

  12. Nancy_Naive Avatar


    If someone you know has student loans, their employer can pay upto $5,000 before the end of THIS year as a tax deductible benefit. It is part of the Covid relief.

    But it expires with 2020.

    TELL YOUR KIDS. There is still time.

  13. Eric the Half a Troll Avatar
    Eric the Half a Troll

    If a contract is a contract and students and their parents need to pay the same price as other business owners and citizens who make poor financial decisions, then why can’t student loan debts be discharged via bankruptcy like other debts? Until such an avenue is available, this is a special type of financial extortion that needs a special type of solution. This coming from a person who paid full price for his and his three children’s college educations, btw.

    1. Nancy_Naive Avatar

      Because, when slavery ended, and after the Irish miners unionized, the economy needed a new slave class. Enter the student.

    2. That only “works” if the government is providing the loans and taking the hit for those that are unpaid. The intent of this provision was actually to reduce the cost of borrowing for students. In the private sector market, the cost of borrowing must be linked to the risk.

      But if the government is doing the lending, then it’s free unlimited money for all. Spend as much as you want on a worthless degree, then declare bankruptcy and get on with your life, or perhaps do the same thing again. Utopia has arrived.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Nathan, I suggest that is one side of a many sided problem. Another problem is fraud and/or misrepresentation by far too many “educational” institutions that admit kids into college who have little or no chance of succeeding at that college that knew it based on their past record, and yet made every effort to keep them there in their classroom seats, piling up their debt, wasting the most valuable times of their lives, and leaving them broken, and disillusioned, without a degree or having a worthless degree. That is what I described here:


        There is a related problem at the top, too, of elite Universities admitting disadvantaged kids who have little change of success there, but would have far better chances of success at a less selective school.

        Both of these despicable tactics used by colleges and university need to be shrunk dramatically in America.

        1. “Nathan, I suggest that is one side of a many sided problem.”

          I was responding to the post above and never suggested otherwise.

          I’ve worked in Higher Education for over 20 years and would agree that it’s severely broken.

          Some of the issues you raise should be addressed by the accreditation process. Institutions with unsavory practices that harm students should not receive accreditation, and their students should not be eligible for loans until the situation has been remedied.

          Many of the problems, however, relate directly to Progressive ideology. I see this getting worse over time, not better. For example, James Bacon’s article about student suspensions links to a report which suggests:

          “Amending Licensure Requirements to include Cultural Competency”

          Let me translate that into practical terms. Teacher education will place even more emphasis on CRT and other nonsense, rather than academics and competencies required to effectively to teach our youth.

          Turning this around will be an uphill battle, but I would definitely encourage a greater emphasis on learning skills and trades rather than the current fixation with degrees.

          I had an electrician do some work that lasted less than 30 minutes. He charged me $150 and I was happy to pay it. He’s so booked up, I could have waited several weeks for help. Luckily, he happened to be in the neighborhood and stopped by after only a few days of waiting.

          1. Reed Fawell 3rd Avatar
            Reed Fawell 3rd

            I agree completely with your comment. And would add that today America’s accreditation system protects the bad actors, giving them full reign to do ever more damage, while protecting them from legitimate competition. We need to shut down these chronically dysfunctional schools, and we need to open the system up to competent, efficient and honest competition.

    3. djrippert Avatar

      The difference is that the federal (and state) government will guarantee these loans without any question of credit worthiness. The loans are more like taxes owed. Try declaring bankruptcy to avoid paying back taxes.

      I’ll help the federal government out. I’ll start a company that will take over 10% of the nation’s student loans. All risk is on my company. No bad debt risk to the federal government. Only I get to pick the loans I take. You’ll see a lot of engineering and accounting degrees in my company’s loan portfolio.

      Oh wait, isn’t that Sofi?

  14. Eric the Half a Troll Avatar
    Eric the Half a Troll

    “Spend as much as you want on a worthless degree, then declare bankruptcy and get on with your life, or perhaps do the same thing again. Utopia has arrived.”

    Sounds like our current lame duck president’s entire business philosophy in a nutshell.

    If this particular clause was about defraying risks, then why the parental co-signing requirements? Nope, this was about a class of citizens who were told their entire lives that they must get a college education if they do not want to be homeless in America (literally ANY four year degree is better than none) and after this coercive programming is firmly rooted are told “sign here” you must accept these terms or that ax will fall. The lending institutions were only too happy to snag those no-lose terms en masse. NN is correct – Sallie Mae is nothing more than the present day sharecropper commissary store.

    1. If someone doesn’t think a specific degree is worth borrowing money for, then that person shouldn’t borrow money to get it.

      Avoiding poverty does not require a college degree.

      “young people can virtually assure that they and their families will avoid poverty if they follow three elementary rules for success – complete at least a high school education, work full time, and wait until age 21 and get married before having a baby. Based on an analysis of Census data, people who followed all three of these rules had only a 2 percent chance of being in poverty and a 72 percent chance of joining the middle class (defined as above $55,000 in 2010.”


      “Nope, this was about a class of citizens who were told their entire lives that they must get a college education if they do not want to be homeless in America…”

      We need to stop telling people things that aren’t true. That’s a good place to start.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        “Avoiding poverty does not require a college degree.”

        This is an excellent point, as are the nearly surefire antidotes to poverty suggested therein – complete at least a high school education, work full time, and wait until age 21 and get married before having a baby.

        Here again, I believe Virginia’s educational establishment grievously failed many of its citizens. One of the most obvious failures beyond telling the public the truth as to how best to escape poverty by demanding good K-12 education and providing it, and using it to graduate from high schools ready and able to work in the real marketplace and then, so empowered, to be able to get and hold a job and only then get married before having a baby, none of this was encouraged or even suggested by Virginia leaders as best I could discern.

        Instead the state and its educational establishment pushed the falsehood that success could ONLY be achieved by getting a four year college degree before working. This falsehood in effect shamed and demoralized kids who wanted to work after high school graduation, and get married around 21 before having children, a group of kids that compose more that half the population at least. Here I fault, in part, the State Council for Higher Education (SCHEV) that I believe over marketed ever more costly higher education for the financial advantage of state institutions, rather than what was best for a significant portion of kids in the state. I fear that in far too many cases this was good for the economics of Virginia colleges, but did great harm to many kids, their parents, and their future.

        1. Reed Fawell 3rd Avatar
          Reed Fawell 3rd

          For example of point of comment above, see today’s Federalist “Is Student Debt Really as Crisis? These Surprising Facts Suggest It’s Not,” by Edward Chang.

          “Recent statistics show that at least one-third of college graduates in the United States are “underemployed” — working a job that typically does not require a degree — with the mismatch especially acute among recent graduates. But just as it matters who the debtors are, it also matters what they’re studying. As of July 2020, the top five most underemployed fields of study are:

          Criminal justice (73.2 percent)
          Performing arts (63 percent)
          Leisure and hospitality (59.8 percent)
          Liberal arts (59.5 percent)
          Business management (58.5 percent)

          It’s beyond the scope of this article to delve into or speculate why these fields are so stunningly underemployed. It’s clear, however, that while some majors simply don’t deliver much return on investment, many students are still borrowing money to pursue these degrees. As Brookings scholar Adam Looney observes, “The people who are borrowing heavily to attend programs that offer no real labor market value — that is troubling.”

          What should be apparent is that a college degree alone does not guarantee lucrative employment. A variety of factors, including the job market and the particulars of the field of study, ultimately determine whether attending college is worthwhile …”

          For more see:

      2. Eric the Half a Troll Avatar
        Eric the Half a Troll

        “young people can virtually assure that they and their families will avoid poverty if they follow three elementary rules for success …”

        I am sure those business owners who followed the three simple rules to business success also feel like bankruptcy protection is unwarranted for those that made less successful choices…

        Alas, as noted students have no such options available to them…

        “We need to stop telling people things that aren’t true. That’s a good place to start.”

        Indeed, but first we must undo the damage that was done with the lies in the first place.

        1. I’m open to helping those burdened with insurmountable debt, but would have two requirements:

          Loans should not be forgiven. They must be paid by someone. I’m open to changing laws to facilitate payments from others.

          Corporations and individuals have donated to BLM and what do we have to show for it? Nothing good, just thousands of burned out buildings, damaged businesses and injured police officers. That money would be much better spent helping students out of debt.

          “BLM has raked in billions since George Floyd’s death—local chapters want to know where it’s gone”


          Loan payments should require the recipient to make a substantial contribution to earn the loan payments. I have personally volunteered thousands of hours to help the youth, elderly, disabled, and others. If I and others can make time to do this important work, so could they.

          1. Eric the Half a Troll Avatar
            Eric the Half a Troll

            Why not a four year stint with military or non-military service (AmeriCorps) in exchange for loan forgiveness? A paid gig that also may just provide some marketable skills.

          2. I don’t know what programs may already exist, but that idea has merit and I support the concept.

          3. LarrytheG Avatar

            I agree with the “service” idea. We already do that for some Doctors , right?

    2. djrippert Avatar

      As far as I know, private lenders provided the money to Trump. If the government stopped guaranteeing student loans then your approach would make sense.

      Oh, and there would one heck of lot fewer loans made. Which might encourage more intelligent choices on behalf of students.

  15. LarrytheG Avatar

    re: “govt” loans. What about FHA loans or SBA loans? How come they don’t have this same problem?

    1. “collateral” – something pledged as security for repayment of a loan, to be forfeited in the event of a default.

      1. Eric the Half a Troll Avatar
        Eric the Half a Troll

        One’s home and business assets are protected to varying degrees when one files for bankruptcy – again, an option not open to students…

        1. djrippert Avatar

          Government guaranteed loans are obligations to the government like taxes. Back taxes are not extinguishable through bankruptcy.

  16. I paid my kids student loans for undergrad, a few years ago I paid off the loans. The main thing I noticed was interest rates were relatively high at the time. You’d think they could offer bargain basement 2-3% or something. At the moment lets say 1%.

    I did not like fairness of the whole scene with FAFSA and all that crap. We were middle class not qualifying for anything, but a little lower income you could be heavily in the aid money.

    1. “I did not like fairness of the whole scene with FAFSA and all that crap. We were middle class not qualifying for anything, but a little lower income you could be heavily in the aid money.”

      Under the current system, no good deed goes unpunished.

      My wife and I started saving for our children’s education before they were born. We sacrificed for many years and did everything suggested to the best of our ability. The result was that each of those sacrifices and steps taken to be responsible, took away from our ability to receive any assistance.

      Most people, including low income, spend money unwisely. At work for example I would regularly see people coming to the office with a Starbucks coffee. I never did that, and wouldn’t even spend the money for K-cups. I make my own coffee using a refillable K-cup device.

      Nancy_Naive (NN) and I both worked our way through college without borrowing money. NN insists that this isn’t possible today. I respectfully disagree. It requires planning and sacrifice, but it can be done. Here’s an example.


      1. djrippert Avatar

        I worked my way through college and borrowed money (which I paid back). I learned more having to balance my time than I ever learned in the classroom. Even though my “during school” jobs were mostly waiter, furniture mover, lawn mower, etc the fact that I worked during the semester was a point I featured when applying for jobs as I got closer to graduation. Later, as a technology executive, my company did a retrospective analysis of what traits at the time of interview had the strongest correlation to success at our company 5 years down the road. By far the best indicator, among those who met the qualifications, was balancing time between studies and other things. Varsity sports and serious extracurricular efforts were a good indicator but paid employment during the school year was easily the best indicator.

        Bottom line – more colleges should focus on matching part time jobs in the community with students.

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