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Let me explain this real slow.
1. I borrow $100 from you today.
2. I pay you $10 every day for a year.
3. I have paid you back $3,650
4. I still owe you $90 somehow.
5. You then "forgive" the $90 debt.
In this scenario, absolutely nobody is paying anybody $90. Nobody is being stiffed $90. Nobody is being forced to pay someone else's $90 debt. Absolutely nobody is "getting a $90 handout for free".
What's happening is you have been paid back your original $100 and then profited a mere $3,550 on top of that and we're saying that's enough profit.
This post is about student loan forgiveness.
@Lana Should be $1 per day in step 2, not $10.
@hutchingsmusic @Lana it's possible you're not current on student loan interest rates.
@Lana if the borrower voluntarily agreed to those terms, then yes, in fact, a "somebody" is being stiffed. That may be the taxpayers or a private entity. But regardless of the amount of service paid, the principal is still a debt. It is still revenue that was expected to be received and the recipient now has to make up for the lack of your payment of your debt.
And making up for a lack of revenue that was contractually guaranteed is very very expensive.
@jay_chi@mastodon.social @Lana
Oh hey... Found a guy to block.
@Lana
Out of curiosity, despite having him blocked, I checked his profile to see if he'd responded. Nothing quite like doubling down on a bad take, eh?
@TheGreatLlama @Lana @jay_chi I guess we're not the "smart and sexy" people this person follows.. 
@nullpotential @jay_chi @Lana unless the central bank is the one directly doing the lending, it's exactly how it works. If I lend you $100, that $100 is going to have come from somewhere. Chances are I've had to borrow it from someone else at a rate almost as crappy as the one I've lent it to you at, and I have to take on the risk that you won't ever pay it back. If I have to lose $90 of the payment that's (say) $85 I can't pay back of _my_ loan.
@Geoff if you as a business or institution borrow $100 and have to pay $3650 of interest on it, you are already insolvent, the fuck are you talking about
@outfrost Maybe try reading the fucking thread and then you'll see what I'm fucking talking about you fucking fuck.
Ooh look, I can sprinkle swear words to sound hard too.
@jay_chi yikes. Way to completely avoid reality and substitute your own.
Yes, it is doing the heavy lifting but the original post's example (which I can no longer see - having been blocked for pointing out that there IS a party on both sides of a debt contract) had a ludicrous service rate.
My point is, defaulting a debt always hurts someone... taxpayers, a grandma's IRA that invested in bank shares, or the next generation through devaluing currency... someone _is_ injured. Just because you don't like that person does not make the injury moral.
@jay_chi @ridetheory @Lana I actually think you're getting blocked because your own profile calls yourself out as a troll.
@jay_chi @ridetheory @Lana "grandma's IRA..." is a fake argument predicated on the fact it was only investing on the disgusting practice in the first place. It wouldn't be affected if the practice were made illegal.
Your entire grasp on the subject is tenuous at most and attempting to use emotion to argue FOR the practice tells us everything we need to know about it.
The only people being "stiffed" when these one-sided contracts, that MUST be entered into (they are NOT voluntary), are cancelled are the people at the top of the money chain; the people with full piggy banks on very large incomes who get huge bonuses based on the amount of money they can squeeze out of people. No taxpayers, no grandmothers, no devalued currency.
The ludicrous service rate, interest, and penalty fees are the point
If one billionaire, using $1 billion, can make the medical degrees free for a whole university forever moving forward (it happened this year), why can't others? Because they would rather keep raking in money and shoving it into storage where it makes even more money without contributing anything to the economy at large.
@Lana that’s it in a nutshell.
@Lana except with federal student loans, the federal government lets banks add the loan value to their balance sheets without actually giving out money the bank holds. It literally gets to add the money out of thin air.
Step 0 is the bank gets to instantly create the $100 from nothing. Nobody pays for it.
If you never paid them back a cent, they wouldn't lose anything but some administrative costs (employee time, paperwork, etc).
The entire scheme is profit without risk for banks
@smeg
This is true for literally all loans. Banks create money out of thin air. That is what they do. That's their whole operating procedure. The Bank Of England has a whole white paper that describes this. https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy
@Lana
@Lana it's expensive to be poor
@Lana Really? That’s a 3650% yearly interest rate, assuming monthly compounding. How is that legal? 
kon mute @x0r @Lana it's an exaggerated post to make a point about real student loans, not a real example of money lending! it doesn't have to be legal (but given the short timescale, assume daily and not monthly compounding imo)
*real* student loans are much bigger amounts of money and thus their compounding interest ends up being similarly drastic and impossible to keep up with, and take many many years to pay off.
@MindmeshLink @Lana Oh, okay. I don't get in how far it's an exaggeration though because I'm from the other side of the Atlantic Ocean. I know the borrowed sums are in the hundreds of thousands of dollars, but what are the interest rates like?
@x0r It varies a lot, especially because some people end up with private loans instead of federal. Between 4% and 18% depending on the situation, give or take a bit.
The average for borrowed amounts is also more in the range of tens of thousands rather than hundreds of thousands, but that's still absolutely massive, especially if you don't actually secure well paying work after college for a variety of reasons (disability, homelessness, you ran out of money partway into the degree, etc)
@MindmeshLink Thanks! I thought tuition fees were in the ballpark of $50,000 per year, so for 4 years you'd end up with $200k of debt. And 18% yearly interest on that is horrendous! How long do these loans usually last?
@x0r @MindmeshLink 30years later and I am still paying off my subsidized student loans. Part of the problem was my government loan has been sold to 3 different companies and none of them play well with the actual federal government that originally funded them.
@daNanner @MindmeshLink There’s so much in this sentence I genuinely don’t understand. If the government sold that debt to a third party, how come you are paying money to that third party even though you never signed any contract with them? If anything, you should still be paying back the government, who might then pay the companies the debt was sold to. And them not playing well with the government shouldn’t be your problem either. Anyway… 
@MindmeshLink @x0r I know. But it has caused me no end of headaches trying to get my student loans discharged since I qualify.
@Lana This car is worth $10,000 but you can have it for $8,000... when the car is really worth $4,000.
@Lana the system in the US is an utter disgrace. It's designed to drive people into wage slavery.
@Lana like many others at this point, I forgave my own student loan debt 
@Lana Not how loans work. You get money. You agree to pay an amount every month for however many years. The total paid never enters into discussion. You already agreed to pay. That agreement may have been utter stupidity on your part, but you agreed. Now you pay. End of story.
@billstclair yikes, way to literally ignore reality.
@Lana Great metaphor. However, I think you're going to need to speak even more slowly for a few in the back. 
飛柳 @Lana@beige.party This is the best way I've ever heard this explained. So clear, so true, and so powerful. Thanks for this.
@Lana Great explanation.
@Lana but in order to be eligible for the $90 of forgiveness I had to tell you that I was having difficulty paying, and pay less. If I just toughed through it, and thought "I am gonna pay this off one day" then no forgiveness.
@Lana I wonder if would be possible to get stats on all current federal student loans that have been paid into for say…five years or more? Then publish the entire amount loaned and the entire amount that has already been paid, and let’s see who is coming out ahead. (Spoiler: It’s not the borrowers.)
@Lana
Ever notice how the GOP talks about helping "the people" like forgiving COVID loans? Until the vote comes up on student loan forgiveness or feeding hungry poor children, then it's all "welfare queens" and "drug addicts". Of course, they are all for reducing taxes on the rich and corporations. Pretty obvious which "people" they are talking about.