The student loan debt bubble has risen to $1.63 trillion in the United States and there are no signs of it slowing down. The Biden Administration recently announced the cancellation of $9 billion in student loan debt. This amount, however, is a drop in the bucket. If the actual student loan debt is closer to $1,639,000,000,000 then canceling $9 billion would still leave the reported number at $1.63 trillion. The amount canceled would also fall far short of Joe Biden’s student loan debt cancellation promise. To even eliminate $10,000 of debt from every student loan debtor would require hundreds of billions of dollars.
There is a school of thought that says student loan debt will never actually be canceled. This is because the bubble is entirely too large and because it is a state debt. Typically, debtor’s prisons are illegal and unconstitutional. Debts to the state are a different story. There are plenty of people in jail and prison in the United States who owe tax and child support debts. Student loans are a state-sponsored debt that won’t imprison a person when left unpaid unlike the aforementioned. However, the federal government has a lot of power when it comes to collecting student loan debt. They have the ability to garnish wages, to intercept tax returns, and bankruptcy cannot be used as a way to escape the responsibility of repaying.
SOURCES:
CNN on X: “As federal student loan payments restart in October, CNN spoke to a lawyer, a doctor, and a scientist about their debt, and how this has impacted their lives. https://t.co/D46p7aBm9o https://t.co/k7cTYTeKzn” / X
Why is the Biden administration forgiving student debt? | Debt News | Al Jazeera
5 options if you’re crushed by student loan, credit card debt – Los Angeles Times
What the return of student loan payments means to these Philadelphians
Born poor, stay poor: what my $120,000 student debt says about class in the US | US student debt | The Guardian
