Student loan forgiveness is being taken seriously right now by the bourgeoisie.
The Federal interest rate going near 0% has led to a massive boom in housing construction. Student loan deferment has led to many people saving up for a down payment on a house. The housing market is carrying the US economy right now.
If student loan deferment ends, this space that Capital found for expansion will disappear. There will be an immediate crisis.
Also, the effort to privatize student loans has been a failure. Betsy DeVos has been the Secretary of Education most dedicated to privatization. She killed the Perkins Loan, which has led many new students to private loans.
Although, after her reign, 92% of public student loan debt are still held by the Department of Education. It is unlikely that the Biden SoE will be more successful at speeding up the process. Capital is in crisis now.
Forgiving public debts is a method of privatization in America, where a culture of indebtedness exists. They want everyone with public student loans to take out private mortgages, owned by JPMorgan, Citigroup, etc.
I'm not saying student loan forgiveness is good or bad. It is good for me. But it serves a purpose that we should understand.
That's great if people are looking to rent. The supply of renters is shrinking because mortgages are incredibly easy to get right now.
Yeah but you have to have some sort of income to be able to get a house. The only people I've noticed buying homes are the rich (buying a bunch to rent out) and the well-off (buying their own home). Most people can't afford or have proof of income even with easy access to loans.
Edit: and "looking to rent" is most people. I think the era of American homeownership is mostly over were on the road to becoming a nation of renters so it's either rent or be homeless.
That is much different than my experiences. I've been hearing so many stories of schoolmates and family members using their student loan deferral money to buy a house. Banks are offering loans with 2-3% down payment. If you can save up $3,000, you can get a loan for a decent house in my neighborhood.
No it is not. The majority of Americans are home-owners, and the rate of rental has crashed this year. For example, rent prices in San Francisco are down a ton this year.
Also, a personal anecdote from the Midwest: my landlord has been unable to fill the downstairs apartment since the pandemic started. Our lease is coming up, and we are going to demand a 25% reduction. We will probably get it.
Our landlord wouldn't drop our rent $40 to keep us on the west coast.
Homeownership was down to 65%, since wages aren't going to increase there's no way Zoomers, mellinials, and gen x are going to able to afford their boomers parents/grandparents houses. Esp after people won't be able to afford the loans and get their homes repossessed. If things keep staying the same while getting slightly worse homeownership will drop well below 50% within the next few decades.
Also just cus rent has gone down temporarily doesn't mean it'll happen forever. Rents have gone down because PMC types have fled the city till things reopen and people who worked in the service industry lost their jobs and then their places of residence. Once PMC types flood back into cities when bars, restaurants, etc reopen rents will start going back up or flattening out.
This an embarrassing thing to have to ask but what do you mean by PMC in this context? The only "PMC" I know is a Private Military Contractor.
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That sucks. Our landlord clearly read some Barron's article which said renovating a house would yield profit in a pandemic. Turns out, no one is renting. It seems like he just wants to stop hemorrhaging money. If we leave, he is fucked.
30-40% of millennials have student loan debt. Now that student loans are in forbearance (and banks dropped their down payment expectations), they are able to afford the $2,000-$5,000 down payment for a house. If student loans are forgiving, there will be a bigger boom.
Most of those service industry jobs are not coming back. The PMC types are all buying houses in the suburbs. They won't be moving back to cities. Half of restaurants will not be able to reopen, and those projections do not account for large-term migration from cities.
We are at the beginning of a second white flight, and student loan forgiveness would help that tremendously.
Those down payments are offset by higher monthly payments which if people countiue losing jobs and wages don't increase it won't matter if you have a house now because you'll lose it down the line.
Also, if the instrest rates aren't fixed people are going to be crushed when they're raised and it'll be '08 all over again .
That's true, but I dont see full loan forgiveness happening any time soon. I know it's being talked about and MAYBE they'll sneak in like 10% forgiveness up to a certain amount of you're up to date on payments into the next stimulus (if there is one). I just don't see any american gov doing anything besides allowing the richest to continue looting what's left of the empire while it falls apart.
I agree entirely. I feel like we're speed-running the last housing bubble. I can see Democrats forgiving student loans to fuel the bubble.
I agree. I just think student loan forgiveness alongside a housing bubble may be the best source of profit. No one makes money off public student loans. It just pays off the US debt, which no one cares about. If even half those student loans became mortgages, investors would be real happy.
I’m not sure if I would describe this as white flight exactly. I see the rich leaving cities for other cities. Everyone I know leaving the Bay Area is moving to Texas and it has to do with how Trump restructured state tax deductions to hurt blue states. If they are staying in the bay, they are just gentrifying new areas. San Francisco rents might be down, but Oakland is booming in price.