The failure of the Biden plan misdirects us from the root problem: It’s not that student loan borrowers need debt relief; it’s that they merit a debt discharge.
Every honest, unfortunate debtor has the constitutional right to a fresh start. That is, the right to discharge their debts, if overwhelming, through bankruptcy proceedings. But student loan borrowers were condemned to “involuntary servitude” when Joe Biden, while still a senator, led Congress to enact the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) in 2005.
This comes up all the time for student loans. The answer is pretty straightforward: if people could discharge student loans, nobody would ever lend money for student loans.
If you had some money and a 17 year old with no income and no credit history wanted to borrow 300k from you… Would you let them? Of course nobody would. The inability to discharge the debt was basically a way for the government to help improve the risk equation for banks lending that much money in such a risky way.
The real answer for this stuff is to instead focus on fixing the college funding model - probably through some voucher system or by making state schools free for undergrad. Once that’s done, you can worry about lessening existing debt burdens for people who need the help.
WTF? This is as convoluted as modern ursury.
