Millennial Z and Boomer X talk about student loan forgiveness in podcast #33. President Biden made student loan forgiveness a plank in his campaign for presidency, and has thus far made good on his promise by forgiving $17billion dollars to over 725,000 people who have taken out student loans to date according to the U.S. Department of Education. You can be assured that this is only the beginning as that forgiveness has only been extended to students who have been defrauded, not allowed to complete their education due to school closure, the permanent and totally disabled, and certain civil servants who are typically paid far lower than the private sector.

According to U.S. News on May 8th, the Biden Administration reportedly planned to forgive up to $10,000 of student loan debt to those who made less than $125,000 per year. The Democrats have been pushing for student loan forgiveness of $50,000 and no mention of a salary cap. While it’s nice that some reap the benefits of forgiveness, it does leave a bad taste in people’s mouths when something seems inherently unfair, and when one person suffers paying back a student loan that can’t be discharged by working two or three jobs for years while others just complain loudly and things happen for their benefit alone. It starts to rankle when others seemingly don’t have any obligation to do anything and you’re always stuck with the tab. Both Millennial Z and Boomer X agree that there needs to be a maintenance of personal accountability with regard to student loans for the borrower, but that also needs to extend to the lending institutions and the universities themselves who enjoyed the “free money” for decades and both enjoyed the guarantee of the federal government behind that money coming in.

However, how do you ensure that we aren’t creating a society of irresponsible, short sighted and selfish individuals while also attempting to be compassionate and thoughtful? Well, you could change the way student loans are made and through whom. You could also repeal the law that makes student loans exempt from bankruptcy discharge. Nobody wishes to declare bankruptcy, and it is conducted through a hearing and enacted by a judge. You could also remove the requirement for a co-signer as this allowed lending institutions to pursue parents and harass those who did not reap the benefits of the loan. These students are adults and should be treated as such with the same expectations. If they aren’t a good risk for the loan, then it shouldn’t be made. Obviously, this may have an impact on how much universities are able to extract from students.

Another point mentioned is the impact of many billions of dollars being injected into the economy which was not previously available due to the required student loan repayments. The main reason for inflation currently is too much money in the system, and now we are going to provide more…much more, and for an extended period because those years of required payments are now gone.

We talk about these points and more, please subscribe!