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Student loan bill sputters in the Senate

  • The Senate blocked a bill to lower interest rates on student loans through higher taxes on the wealthy via the Buffett rule.
  • The measure received 56 "yes" votes and 38 on the "no" side.
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Comments (22)
  • DrGarnicus
    , contributor
    Comments (97) | Send Message
     
    Good. This was only going to increase tuition astronomically.
    11 Jun 2014, 11:35 AM Reply Like
  • june1234
    , contributor
    Comments (3066) | Send Message
     
    Tuition has been astronomical for many years thats why they needed loans. 50% of grads haven't been able get jobs in their chosen fields for years so the program now has a 15% default rate on a loan which can not be discharged via BK and is 100% backed by government or taxpayer. Al Capone should have been a student loan banker.
    11 Jun 2014, 01:15 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (848) | Send Message
     
    Good - I was starting to get worried about the super rich.

     

    Consider that the top 400 individual tax returns had an average adjusted gross income of more than $200 million each in 2009 - that's only $548,000 a day, and just a bit more than 4X the average in the early 1990's. These people are clearly struggling and need our help.

     

    To be fair, we've done what we can: these 400 returns show an average effective tax rate in the mid-teens (about 18%) in the five years to 2009, versus an average effective rate of more than 26% in the 1990's.

     

    Asking them to pay a bit more in taxes - maybe even a quarter of the way back to what they paid 20 years ago - clearly isn't the answer; what can we do to get them to the single digits?
    11 Jun 2014, 11:58 AM Reply Like
  • 1980XLS
    , contributor
    Comments (3333) | Send Message
     
    And you think 400 people will make difference? Seriously?

     

    http://nyti.ms/1kOXzMj
    11 Jun 2014, 12:16 PM Reply Like
  • aretailguy
    , contributor
    Comments (1292) | Send Message
     
    This is all about class warfare. Divide and conquer. Rich vs poor. Old vs young. White vs black. Straight from the Saul Alinsky playbook.
    11 Jun 2014, 12:25 PM Reply Like
  • DrGarnicus
    , contributor
    Comments (97) | Send Message
     
    Great article, 1980!
    11 Jun 2014, 12:39 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (848) | Send Message
     
    "And you think 400 people will make difference? Seriously?"

     

    By that logic, shouldn't these individuals just pay nothing at all? They're only paying $16 billion a year anyways. How about extending it to the top 1,000 instead of just 400? Or the top 10,000?

     

    Rather than reducing the tax burdens on 5.2 million Americans by ~$1,000 (an amount that actually matters to these individuals), you think it's more logical for the top 400 to pay 18% instead of the 26% - the amount they paid all throughout the 1990's?
    11 Jun 2014, 12:45 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (848) | Send Message
     
    Take a look at some tax data going back a few decades - the rich are winning...
    11 Jun 2014, 12:46 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3333) | Send Message
     
    Ignore the data & the facts.

     

    The top 10% now pay a larger percentage of overall income tax revenue, than any time in history.

     

    At the same time a larger percentage of middle class pay no income taxes at all then ever before, after deductions and exemptions.

     

    And don't even go there, re Soc Sec taxes BS

     

    That's like saying me funding my IRA is a tax to benefit society.

     

    http://bit.ly/SzrAnC
    11 Jun 2014, 12:55 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (848) | Send Message
     
    "Ignore the data & the facts."

     

    I'm supplying you with the facts on the top 400 filings and the tax rates they've paid over the past 25 years; here's the link if you want to check it out for yourself:

     

    http://1.usa.gov/Szsq42

     

    You could also look at corporate taxes a percentage of GDP, another measure near multi-decade lows:

     

    http://bit.ly/Szsroq

     

    These are raw numbers that paint a pretty clear picture; do with them as you please.
    11 Jun 2014, 01:04 PM Reply Like
  • qwerty3656
    , contributor
    Comments (87) | Send Message
     
    Transcripts&10-K's
    I don't want to get into a big debate, but I just want to understand one point. IF a lot of income is from tax exempt investments (for example municipal bonds), do you think that it is "unfair" that they don't pay taxes on that income?
    11 Jun 2014, 02:08 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (848) | Send Message
     
    Qwerty,

     

    I wouldn't have an argument with that (for municipal bonds); of course the interest income received by holders of municipal bonds has been exempt from federal tax for the past century, so I'm not sure there's any reason to believe that's what we're seeing (the real shift is towards capital gains, which coincided with significant reductions in the cap gains rate over the last two decades).

     

    At the same time, I'm very much for something like the Buffett Rule, particularly on the level we're talking about here (top 400) - which could obviously nullify the benefit of holding munis for these individuals.
    11 Jun 2014, 03:28 PM Reply Like
  • kmi
    , contributor
    Comments (4238) | Send Message
     
    FT had a great chart on student loan growth:

     

    http://on.ft.com/SAsiRD

     

    Bottom line, there is significant growth in both the cost of tuition which is clearly outpacing inflation by far, as well as in the percentage of students taking loans.

     

    I''ll point out that the 2nd part - the significant increase in the amount of students relying on loans - is definitely a dark cloud rising. It suggests parents are increasingly unable to fund their children's education, be that because of the increase in cost of tuition or the slower growth of incomes vis a vis the cost of tuition. Which means more future generations of workers will be burdened by debt later into their lives, which may slow down household formation and general consumption.

     

    In other words, it can be a serious future drag on economic growth.
    11 Jun 2014, 07:10 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3333) | Send Message
     
    KMI,

     

    Yes, it also says plenty of free loan money available, means no market pressure from colleges to control tuitions costs whatsoever.

     

    Make it easy to pay ridiculous tuitions, and the colleges will be happy to take the money.

     

    They will build beautiful, fancy buildings, mess halls, and made out of Brass & Marble, along with lobby fountains and the like, to impress the next visitors tour of potential new victims.

     

    Not sure what that has to do with learning though.
    11 Jun 2014, 07:55 PM Reply Like
  • kmi
    , contributor
    Comments (4238) | Send Message
     
    Although I don't disagree that the availability of loans makes them attractive, do you think the country stands to benefit by tightening student lending, intentionally, to reduce enrollment to force universities to reduce costs?

     

    To me that sounds like just as bad a solution, reducing the quality of the workforce in the country -intentionally- in hopes that higher education costs drop. It will lead to the same outcome: lower wages overall for the country at large as a result of a drop in the nation's competitiveness in the international arenas, and lower consumption, growth and economic activity as a result of that.
    11 Jun 2014, 11:48 PM Reply Like
  • aretailguy
    , contributor
    Comments (1292) | Send Message
     
    1980XLS, all of what you say and this; it says that they can pay college presidents and deans and admin types hundreds of thousands of dollars, all paid for with student loans. Our society is becoming much more like Russia all the time. Run of, by, and for the bureaucrats. An example of a reaction to this is the recent defeat of Eric Cantor. Throw all the bums out, spread the graft around.
    11 Jun 2014, 11:57 PM Reply Like
  • aretailguy
    , contributor
    Comments (1292) | Send Message
     
    KMI, we really don't need too many more English or philosophy majors graduating $150,000 in debt working at Denny's. There are way too many college kids graduating (or not) with completely worthless majors. I've interviewed thousands of them applying for jobs as cashiers. Very sad.
    12 Jun 2014, 12:01 AM Reply Like
  • 1980XLS
    , contributor
    Comments (3333) | Send Message
     
    People should do some kind of cost/benefit/marketing... before borrowing and spending $150K for college. In addition, not all are
    "college material," despite the propaganda from government, academia and the finance industry. Unfortunately, every parent is brainwashed into believing their kid must go to college and must work in a cubicle for a large company to be successful.

     

    And, like aretailguy says, one's major makes a huge difference.

     

    My daughter graduated last week (dual major, Mech engineering/aero-space)

     

    She has multiple offers from mega blue chip companies well into six digits to start, as a 21 year old out of college. All while marketing majors from her school struggle to get $30K offers, (not even enough to live & service the college debt in the NY metro area) These kids are screwed badly.

     

    Unless one is pursuing a special talent, it seems S.T.E.M. based studies are the only one's worth accumulating debt in order to obtain a degree. At least as things appear right now.
    12 Jun 2014, 07:39 AM Reply Like
  • kmi
    , contributor
    Comments (4238) | Send Message
     
    1980,

     

    Suggesting that higher education isn't good for the country as a whole, period, the end, is downright silly. Everyone who can, should absolutely go to college, and we should make that option as feasible as possible.

     

    Most countries around the world provide FREE college level education to their citizens, and in most cases, it isn't the BEST quality of education available, but it is absolutely an option. Your suggestion effectively implies we don't need or want an educated populace and if you don't understand the ramifications of having an larger population of undereducated people in the US vis a vis our international competitors, we have nothing more to discuss.

     

    As for aretailguy suggesting the kids graduating today are ovberwhelmingly gravitating towards useless majors, that's a failure of the system at large that needs to be addressed not by refusing them access to higher education but by providing better direction. I went to high school in a country that suggested you go with 'business administration' if you had no clue what you wanted to do after college. It was considered the catchall. Obviously the US is failing at some pretty simple stuff if the 'catchall' for high school graduates is 'Philosophy'.

     

    Frankly I find the idea that you guys suggest we don't need an educated population in the US absolutely appalling.
    12 Jun 2014, 11:51 AM Reply Like
  • 1980XLS
    , contributor
    Comments (3333) | Send Message
     
    KMI,

     

    I am by no means suggesting it is silly.

     

    Just that the costs and choosing the subject & end market demand of one's studies, should be considered and chosen a bit more carefully.

     

    Even so, that does not mean college is for everybody.

     

    Selling somebody and taking their money, after convincing them to borrow money for a useless degree is worse that predatory lending.

     

    In the US, people have been conditioned to frown upon anybody that works with their hands or gets them dirty.

     

    In Germany it is considered quite noble to become skilled tradesman such as a machinist, plumber electrician, etc, via an apprenticeship. Such occupations command much respect over there, unlike here.

     

    Why? Clearly there is some other societal forces at work here.

     

    Do you know any parents that want their kids to become construction workers?

     

    Somebody will have to do these jobs, and we will likely have a severe shortage of people able to perform these vital services.

     

    BTW:

     

    The "catchall" these days for a default major, seems to be Marketing.

     

    All my daughter's friends with such degrees (same school in some cases) have only been offered jobs in the 25-30% pay range as has my daughter.

     

    They are screwed for a decade or two, as they were sold a bill of useless goods. Now they have to pay back $100K, none of which is dischargeable in bankruptcy, with a $12 per hour job.
    12 Jun 2014, 12:20 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3333) | Send Message
     
    Here ya go. Just like I said.

     

    Parents still setting up their kids for college debt, I'm sure.

     

    http://seekingalpha.co...
    12 Jun 2014, 08:30 PM Reply Like
  • kmi
    , contributor
    Comments (4238) | Send Message
     
    Yup, we see that over and over.

     

    But it also speaks to what the solution to the problem is, as in, it is likely not, as you previously suggested, restricting access to loans or forcing the price of higher education upward, but more so directing potential 'marketing' majors towards positions more productive for the overall economy, and more beneficial for their own pockets. And I'm ok with that.
    12 Jun 2014, 10:33 PM Reply Like
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