Will Biden Forgive Student Loan Debt?
The political pressure is on. Outspoken Democrats want one thing - student loan forgiveness. With a stroke of a pen, they want President Biden to forgive $1.7 trillion worth of student loan debt. President Biden has been hesitant to take a stand on student loan debt. It is a political field of land mines. Think about it for a second.
Does he wipe out student loan debt for students currently in school and students who have graduated?
What about incoming students? Are they allowed to accumulate new student loan debt?
What about current students? Do they get future debt wiped out?
What about the students whose financial life was ruined by defaulting on student loan debt?
What about the students who paid off their student loan debt recently or in the past?
Can we afford it? (Of course not, we can borrow the money)
Politicians tend to make decisions without political blowback. Student loan debt forgiveness would benefit some and penalize others. There would be blowback for sure. The only solution is free college. I would like to think that as ill-advised as politicians seem to be, this option is not on the table, with the exception of the highly radical liberals.
So, what does President Biden do? He simply extends the student loan debt moratorium. Since March 2020, Americans with student loan debt have not had to make their monthly payment and have not accrued interest. That moratorium was supposed to end with payments starting back on May 1st. It looks like he will extend that period of non-payment until August or September of this year.
Of course, this begs another bigger question:
Are borrowers in such bad shape that they need an extension on the moratorium? After all, this has been going on for over two years amid “strong economic growth” and supposedly “low unemployment.” The days of blaming it on the pandemic should be over.
President Biden seems to take the course of action that most politicians take - just kick the can down the road. It would be refreshing if President Biden would positively modify the student loan program to include ridiculously low-interest rates, or no interest at all, and assistance helping those who have defaulted or fallen behind on student loan payments.
The worst decision he can make is not taking a stand against a really bad idea. What do you want to bet that he ends up extending the moratorium all the way through December 31st of this year just to cover the midterm elections?