With borrowers poised to receive federal student loan forgiveness, one expert says changes may prevent them from racking up so much debt in the first place
2-Year Treasury Yield Reaches Fresh 15-Year High Ahead of Federal Reserve Interest Rate Hike DecisionUnder Biden's plan, millions of borrowers will see $10,000 in forgiveness for federal student loans, or up to $20,000 for Pell Grant recipients. As a result, almost 20 million people, or nearly 45% of borrowers, will have their debts fully canceled,That's occurring in a population of more than 40 million borrowers who hold $1.7 trillion in student loan debt.
"There's no reasonable argument for the government forcing you to be paying this back literally when you're 99," Kotlikoff said.1. Make student debt dischargeable in bankruptcyKotlikoff argues this should be changed. "I think the best way to relieve student debt would be to allow it to be discharged in bankruptcy," SummersSuch a move would also penalize private creditors rather than subsidize them as Biden's plan partly does, Summers wrote.Everyone should be able to borrow at the government
This would prevent parents from borrowing an unlimited amount on behalf of their children without any knowledge of who is going to repay the debt, he said.