According to the NYT article[0] "about five million borrowers are in default" which means like 1.5% of the population is about to have 15% of their wages garnished. Seems pretty intense.
Why doesn't the Gov't just take the money from the schools that the people went to? Drain those billion dollar endowments seems way easier than all this paperwork.
Hi School, xx% of your students haven't paid their loans, we're taking $xx,xxx,xxx to cover it. Thank you!
If the schools made a bad loan, they should be held accountable. Especially since they overcharged and failed to deliver outcomes. They ripped a lot of people off.
> Why doesn't the Gov't just take the money from the schools that the people went to? Drain those billion dollar endowments seems way easier than all this paperwork.
For student loan repayment? This is one of the least thought out ideas I've seen on HN in a while, and there have been some doozies.
Let's say you get a $20k personal loan from the bank and you spend it on various things or maybe one big purchase (this is as opposed to an asset backed loan like a mortgage or a normal auto loan where the item could be repossessed or home foreclosed on). You fail to pay back the loan, in what universe does it make any sense for the bank to go to the store or stores you purchased from to demand the money back rather than to you, the borrower?
> in what universe does it make any sense for the bank to go to the store or stores you purchased from to demand the money back rather than to you, the borrower?
It's a common legal strategy to sue those with deep pockets, regardless of whether they bear the greatest responsibility, in order to get more money. Makes perfect sense because they (the store in your example) actually have the cash. Are you going to sue the gambler or the casino?
Another strategy is aggregation. If you can combine cases into a single case, the payout can be larger for similar effort - but once again this depends on ability to pay.
Going one step further, if the seller is part of an illegal cartel or pyramid scheme, the government might be able to justify seizing its assets, or perhaps collecting punitive damages.
Dont confuse economics with politics. Commenter may simply be pointing out that a government already well known for its distaste of higher education institutions might decide that taking the money from them in one fell swoop and instantly wiping out student debt is vastly preferable to annoying a swath of voters that could make a difference in the midterms.
Its the next illogical step after cutting funding. Take funds from them, maybe even eminent domain, civil asset forfeiture is probably on the table too.
They aren't a bank. Banks get paid in interest for the risk they take in making the loan. Student Loans have no risk because you can't discharge them. But they carry high interest rates.
Schools made bad predatory loans. Schools colluded with other schools to raise tuition. And schools made loans to any warm body they could to get them in the door. They did discount some tuition, but that was only enough to justify it as charity and not have to pay taxes. Its all a fraudulent scam.
> This is one of the least thought out ideas I've seen on HN in a while,
> So you're an idiot
This is not acceptable on HN, no matter how right you are or feel you are. The guidelines make it clear we're here for curious conversation, not fulmination and personal attacks.
Or just forgive them, which is half the cost of total PPP loan forgiveness. But the point is to make these people suffer, which debt forgiveness would not enable. For other comparison, student loan debt forgiveness would cost less than half a year of 2026 US military spending (~$900B).
Garnishing these wages is a regressive, punitive tax that will further slow an economy very near recession territory. But I digress, as if facts mattered. The best we can do is help those who want to leave expat out of the US on whatever visa they can to developed countries and walk away from this debt.
> In particular, the Paycheck Protection Program has so far forgiven $757 billion in loans to private businesses, according to government databases — nearly double what the Biden administration's student-loan forgiveness would have cost.
Or allow people to declare bankruptcy and punish the schools and the loan companies. Garnishing wages is also a normal thing to do with debt you can't pay.
Forgiveness means paying them back, which means these companies (and the people who got loans) will have learned nothing.
We have financial tools available to this. The only problem is very, very wealthy donors will suffer immensely.
> Garnishing these wages is a regressive, punitive tax that will further slow an economy very near recession territory.
Probably not. It will certainly impact inflation however. Just like the PPP and trump bux.
> In particular, the Paycheck Protection Program has so far forgiven $757 billion in loans to private businesses
The PPP shouldn't have forgiven anyone either. There's a reason we are in the situation we are in. The financial system is not allowed to fail as intended. Instead we prop it up like weekend at the bernies with infinite money printing and forgiveness.
I struggle with this idea people aren't allowed to FAFO anymore. If we do this, why not pay back every loan. That'll certainly bolster the economy!
You think these are moral failures, or there’s a lesson to be learned. That’s a naive idea. These are governance system failures, and these people should not be punished for a suboptimal system that we put them through. They don’t get a chance to make the decision again, so what would this teach them? “So sorry you live in a poorly functioning country that doesn’t subsidize education and we told everyone they need this credential to have a middle class life haha better luck next life!”
The debt doesn’t matter, it should’ve never been issued, forgiving it won’t create inflation (they’re already not paying the debt), we’re just collectively cruel and low empathy at a nation state governance level for what’s happening. And the country will deserve the outcome.
According to the NYT article[0] "about five million borrowers are in default" which means like 1.5% of the population is about to have 15% of their wages garnished. Seems pretty intense.
https://www.nytimes.com/2025/12/23/business/student-loan-deb...
Why doesn't the Gov't just take the money from the schools that the people went to? Drain those billion dollar endowments seems way easier than all this paperwork.
Hi School, xx% of your students haven't paid their loans, we're taking $xx,xxx,xxx to cover it. Thank you!
If the schools made a bad loan, they should be held accountable. Especially since they overcharged and failed to deliver outcomes. They ripped a lot of people off.
> Why doesn't the Gov't just take the money from the schools that the people went to? Drain those billion dollar endowments seems way easier than all this paperwork.
For student loan repayment? This is one of the least thought out ideas I've seen on HN in a while, and there have been some doozies.
Let's say you get a $20k personal loan from the bank and you spend it on various things or maybe one big purchase (this is as opposed to an asset backed loan like a mortgage or a normal auto loan where the item could be repossessed or home foreclosed on). You fail to pay back the loan, in what universe does it make any sense for the bank to go to the store or stores you purchased from to demand the money back rather than to you, the borrower?
> in what universe does it make any sense for the bank to go to the store or stores you purchased from to demand the money back rather than to you, the borrower?
It's a common legal strategy to sue those with deep pockets, regardless of whether they bear the greatest responsibility, in order to get more money. Makes perfect sense because they (the store in your example) actually have the cash. Are you going to sue the gambler or the casino?
Another strategy is aggregation. If you can combine cases into a single case, the payout can be larger for similar effort - but once again this depends on ability to pay.
Going one step further, if the seller is part of an illegal cartel or pyramid scheme, the government might be able to justify seizing its assets, or perhaps collecting punitive damages.
Dont confuse economics with politics. Commenter may simply be pointing out that a government already well known for its distaste of higher education institutions might decide that taking the money from them in one fell swoop and instantly wiping out student debt is vastly preferable to annoying a swath of voters that could make a difference in the midterms.
Its the next illogical step after cutting funding. Take funds from them, maybe even eminent domain, civil asset forfeiture is probably on the table too.
They aren't a bank. Banks get paid in interest for the risk they take in making the loan. Student Loans have no risk because you can't discharge them. But they carry high interest rates.
Schools made bad predatory loans. Schools colluded with other schools to raise tuition. And schools made loans to any warm body they could to get them in the door. They did discount some tuition, but that was only enough to justify it as charity and not have to pay taxes. Its all a fraudulent scam.
[flagged]
> This is one of the least thought out ideas I've seen on HN in a while,
> So you're an idiot
This is not acceptable on HN, no matter how right you are or feel you are. The guidelines make it clear we're here for curious conversation, not fulmination and personal attacks.
https://news.ycombinator.com/newsguidelines.html
Or just forgive them, which is half the cost of total PPP loan forgiveness. But the point is to make these people suffer, which debt forgiveness would not enable. For other comparison, student loan debt forgiveness would cost less than half a year of 2026 US military spending (~$900B).
Garnishing these wages is a regressive, punitive tax that will further slow an economy very near recession territory. But I digress, as if facts mattered. The best we can do is help those who want to leave expat out of the US on whatever visa they can to developed countries and walk away from this debt.
> In particular, the Paycheck Protection Program has so far forgiven $757 billion in loans to private businesses, according to government databases — nearly double what the Biden administration's student-loan forgiveness would have cost.
https://www.cbsnews.com/news/ppp-loan-forgiveness-student-lo...
https://usafacts.org/articles/how-much-does-the-us-spend-on-...
https://www.defensenews.com/congress/2025/12/17/senate-passe...
Or allow people to declare bankruptcy and punish the schools and the loan companies. Garnishing wages is also a normal thing to do with debt you can't pay.
Forgiveness means paying them back, which means these companies (and the people who got loans) will have learned nothing.
We have financial tools available to this. The only problem is very, very wealthy donors will suffer immensely.
> Garnishing these wages is a regressive, punitive tax that will further slow an economy very near recession territory.
Probably not. It will certainly impact inflation however. Just like the PPP and trump bux.
> In particular, the Paycheck Protection Program has so far forgiven $757 billion in loans to private businesses
The PPP shouldn't have forgiven anyone either. There's a reason we are in the situation we are in. The financial system is not allowed to fail as intended. Instead we prop it up like weekend at the bernies with infinite money printing and forgiveness.
I struggle with this idea people aren't allowed to FAFO anymore. If we do this, why not pay back every loan. That'll certainly bolster the economy!
You think these are moral failures, or there’s a lesson to be learned. That’s a naive idea. These are governance system failures, and these people should not be punished for a suboptimal system that we put them through. They don’t get a chance to make the decision again, so what would this teach them? “So sorry you live in a poorly functioning country that doesn’t subsidize education and we told everyone they need this credential to have a middle class life haha better luck next life!”
The debt doesn’t matter, it should’ve never been issued, forgiving it won’t create inflation (they’re already not paying the debt), we’re just collectively cruel and low empathy at a nation state governance level for what’s happening. And the country will deserve the outcome.
[dead]