The America First Standard #9: Steps to Fixing the Student Loan Bubble
How the tables have turned in just the past year. Just one year ago, former President Joe Biden promised to forgive the student loans of tens of thousands (or more) of public service workers—costing American taxpayers nearly several Billion dollars in Federal student loans.
Student Loan forgiveness was one of the key issues that Joe Biden and later Kamala Harris ran on in the 2024 presidential election. During the Biden administration, President Joe Biden ordered the Department of Education to suspend federal student loan collections in August 2022 after the Federal Government paused payments and interest during the COVID-19 pandemic. Consequently, millions of federal student loan borrowers have not needed to pay back their loans for the past few years.
Then in June 2023, the US Supreme Court ruled against the Biden administration’s plan to forgive hundreds of billions in federal student loans for tens of millions of Americans in the landmark case Biden v. Nebraska.
Then earlier this month, the Trump administration announced a major change to the Federal government’s handing of the student loan debt bubble. In a recent press conference, White House Press Secretary Karoline Leavitt announced that the Federal government will start collecting the combined $1.6 trillion of student loan debt owed by more than 40 million borrowers in America.
Student loan debt collections will begin next week on May 5th, and delinquent borrowers may see their wages garnished and federal tax refunds withheld.
According to Leavitt, more than half of borrowers are not current on the federal student loans–meaning that most borrowers are either delinquent on their periods or in period of deferment. The Trump administration is pointing how unfair it is for the rest of America to allow delinquent student loan borrowers to hold the American taxpayer hostage by refusing pay back the money that they willingly borrowed.
Education Secretary Linda McMahon has also reiterated the same sentiments as the White House Press team
Similarly, Secretary McMahon recently published an op-ed in the Wall Street Journal discussing how nonprofits and American colleges have significantly profited from the Federal Government’s reckless subsidizing of the Higher education. Unlike the previous administration, the Trump administration is looking to hold all parties accountable when it comes to the student loan crisis–starting with the borrowers themselves.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” – Secretary McMahon
For too long, the hard-working taxpayers of American have footed the bill when it has come to the ballooning student debt crisis. For decades, irresponsible administrations in American education encouraged multiple generations of young Americans to take on massive amounts of debt to attend American universities.
Certainly, many young Americans have found a lack of highly-paid jobs coming out of university and are suffering from the exploitative system of usury that America’s financial system depends on. The Trump administration and the Republican party-at-large can and should do a lot more to limit the high interest rates that keep untold millions of Americans in never-ending cycle of debt slavery.
That being said, the ploy of “student loan forgiveness” that the Biden administration offered was only a band-aid solution on a much-larger issues. Offering “student loan forgiveness” would not hold American universities accountable for allowing 18 year-olds to accept a dangerously-high level of debt for a college degree.
The Federal government should not loan out hundreds of thousands of dollars to 18 year-olds without an real life plans. Would an 18 year-old with no job be allowed to take out a massive an million dollar home? Of course not. No bank would ever give out a reckless loan to someone without an income. Why then should the Federal government do the same thing but with Federal
The 2nd Trump administration’s changes to the Federal Government’s student loan payment policies are a first and necessary step to addressing the many issues in American Higher education—including the student loan crisis.
