When you go through bankruptcy, most of your loans can be discharged. This comes at a big cost to you of course, in the form of a significantly reduced credit score, making it near impossible to borrow at a reasonable interest rate for the next 7 years, but they can be discharged and give you a blank financial slate to build yourself anew. Donald Trump knows all about this.
Mortgages, car loans, medical debt, credit cards, lines of credit, all of these can be wiped clean through bankruptcy, except for public student loans.
That’s the first big difference.
The other difference is that there really is no alternative for many Americans except for going to college. College opens the door to many of the most profitable careers you can do, plus liberal arts gives you the flexibility to be able to move to other adjacent fields because you have a general education. Nothing else can provide such flexibility in such a short amount of time.
For many Americans, the only way to gain such freedom is to take out student loans.
The hardest part for a mortgage is to be able to make the downpayment, and if you can’t pay off your mortgage, you can sell your house. Same with a car loan. With a credit card you can sell what you bought with your credit card. You can’t sell your education and get a large sum of money to cover your student loans in a short period of time.
Medical debt should also not be a thing, but since its private debt the solution is universal health care. A story for another time, when we have the votes in congress to deal with it.
Also, if one American doesn’t go to college or delays their college because they can’t get a student loan or pay for college in any other way, than the economy will pay dearly.
It’s also because like most Americans, I believe college should not be a luxury, and like most economists, I know that education is critical to the development of our economy. As more and more Americans go to college, our economy will benefit far beyond the additional cost to the Federal government. College should have no financial burden, and anyone who is willing and able to do the work should be able to go.
Student loans don’t just put college graduates in debt, it makes it impossible for many Americans to go to school at all. They widen inequality, harm economic growth, and reduce social mobility.
Student loans are a parasite on our society.
Making college affordable or free again will take congressional action. That’s unlikely to happen for a while. But the President has the power to pardon student loans up to $50,000 every single year. This will increase access to opportunity, improve our economy, and make America a better place to live.
And President Biden can do it without Joe Manchin’s permission.
Restore the social contract. Rebuild the American Dream.
Pardon student loans.