There was a viral Facebook post that appeared on February 2nd claiming student loan debt had been forgiven by President Biden. “My student loans are gone,” reads a Feb. 2nd Facebook post with hundreds of shares. “I love you Biden!”
The sentiment is probably appreciated but the news is premature. Biden has yet to issue an executive order on student loan debt. Many Democrats are urging the president to cancel $50,000 in debt with the stroke of a pen. But Biden says he would much rather involve Congress in the decision. And getting any kind of consensus on forgiving student loan debt is going to be very difficult.
Some student loan debtors have decided to have a “debt strike” and refuse to pay on their loans until Biden acts.
Fabares has now joined the Biden Jubilee 100, a group of 100 student loan borrowers who have stopped paying their debt. The Debt Collective, which calls itself “a union for debtors,” has organized the strike, hoping to pressure President Joe Biden to cancel the country’s entire outstanding student loan balance of $1.7 trillion.
“We’re going to win what we organize for,” said Thomas Gokey, co-founder of The Debt Collective.
The anticipation that Biden will act soon is driving the effort. Like the migrants lining up at the border ready and waiting for Biden’s amnesty, the student loan debtors are under the impression their loans will magically disappear once Biden takes action.
Is that really a good idea?
Critics of student loan forgiveness argue that it wouldn’t significantly stimulate the economy since college graduates tend to be higher earners who would likely redirect their monthly payments to savings rather than additional spending. Others say it would be unfair to those who’ve already paid off their student debt or never took out loans, and would send the message that it’s OK for people to ditch their debts.
But some borrowers think they’re being held to an unfair standard to be forced to pay off the money they borrowed.
Student loan borrowers are held to an unfair, punishing standard, Fabares said.
“Companies walk away from their debts due to bankruptcies and bailouts,” he said. “But we’re trapped in our debts.” (Student loans are hard, if not impossible, to discharge in bankruptcy.)
Because someone held a gun to their heads and forced them to borrow the money in the first place.
I realize that college today is massively more expensive than it was 45 years ago. And even advocates for higher education are coming around to the idea that a 4-year college is not for everyone. Not only is it unnecessary for many students, but taking out loans to pay for a college education with no thought of what kind of post-graduate employment would be needed to keep up with loan payments is irresponsible.
I’m not entirely against forgiving some students some of their debt. But debt forgiveness is tricky and unless safeguards are put in place, another $1.7 trillion in debt will build up in a few years and the same cries for relief will come from students who should have known better before burdening their futures with loan payments they could never afford.