Peter Brandt, a prominent trader and author, on Wednesday, proposed a radical idea for student debt forgiveness, suggesting that colleges and universities should bear a significant portion of the burden.
What Happened: Brandt, in a tweet, argued that institutions of higher education should be required to forgive at least 50% of student debt.
He justified this by pointing out that tuition rates have doubled the rate of inflation in the past 20 years, the cost of education in the U.S. is exorbitant compared to other countries, and the total endowment of all U.S. colleges and universities stands at a staggering $807 billion.
Why It Matters: This comes at a time when student debt relief is a hot topic in the U.S. The Joe Biden-led administration recently wiped out $39 billion of student debt for over 800,000 Americans, despite the Supreme Court striking down a broader student debt relief plan.
Biden’s new student loan repayment plan came under scrutiny due to the potential for accruing interest, which could add thousands of dollars to the debt of millions of Americans.
The proposed repayment plan allows financially distressed borrowers to delay payments from October 2023 to September 2024 without the threat of default or a decline in credit score. However, interest will still accrue on these loans, creating a steeper climb for borrowers when they begin payments again.
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